EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective as of February 1, 2001, between Computerized
Thermal Imaging, Inc., a Nevada corporation (the "Company"), and Xxxxx X.
Xxxxxxx, an individual residing in Farmington, Utah (the "Employee")
(hereinafter collectively, the "Parties").
RECITALS
WHEREAS, the Employee has been advised that the Company is contemplating a
relocation of its principal executive offices to Portland, Oregon;
WHEREAS, in connection therewith, it is contemplated that the Company's Chief
Financial Officer will be required to reside in Portland, Oregon;
WHEREAS, the Employee does not wish to relocate his employment if such move
occurs;
WHEREAS, the Company values the continued employment of Employee during the
term of this Agreement;
WHEREAS, the Employee hereby relinquishes his ownership and all rights in
those certain 100,000 incentive stock options granted to Employee as of May
23, 2000; and
WHEREAS, the Employee hereby waives any claims (except for breach of this
Agreement by the Company), if any, that Employee has now or which may arise in
the future in connection with Employee's employment with and future retirement
from the Company.
NOW THEREFORE, the Company and Employee desire to restate and clarify the
terms of continuing employment of the Employee during the term of this
Agreement.
WITNESSETH
1. Employment. The Company hereby employs the Employee, and Employee
accepts such employment by the Company, upon all the terms and conditions
hereinafter stated, and as subject to termination as provided in Section 4
hereof. Employee shall be employed as Chief Financial Officer, Secretary and
Treasurer of the Company until the earlier of: 1) such time as a replacement
for such offices is employed by the Company (the "Replacement"), or 2) until
termination of Employee's employment with the Company. If a Replacement is
employed by the Company prior to the termination of Employee's employment with
the Company, Employee shall resign from his offices and duties as Chief
Financial Officer, Secretary and Treasurer but shall continue to be employed
by the Company thereafter in the capacity of Director of SEC Reporting. In
any capacity of employment hereunder, Employee will report to the Chief
Executive Officer of the Company in the performance of his duties.
2. Extent of Service. The Company relies upon Employee to devote
sufficient time and energy to the business of the Company as is reasonably
necessary to fulfill the spirit and purpose of this Agreement. During the
term of this Agreement and for all time thereafter, Employee shall, in good
faith, protect the good name and reputation of the Company and its officers
and directors and shall make every reasonable and good faith effort, during
the term of this Agreement, to retain and maintain the business relationships
important to the Company. Employee shall not be prevented from making passive
investments in other businesses or enterprises or from being employed by
another company during the term of this Agreement, if (i) such other
companies, businesses, or enterprises are not engaged in any business
competitive with the business of the Company, and (ii) the Employee has
complied with Section 8 of this Agreement with respect to such other
employment or passive investment. It is specifically understood by the parties
hereto that, during the term of this Agreement, the Employee shall be seeking,
and may accept, an offer of employment from another company. It is further
understood and agreed to by the parties hereto that the effectiveness of this
Agreement shall survive the Employee's acceptance of employment with any other
company. More specifically, notwithstanding any other provision of this
Agreement and except for voluntary termination or termination for "Cause" as
defined herein, the Employee's employment with the Company shall continue for
a period of six months thereby allowing Employee's employment with the Company
to continue for sufficient time to vest in the Restricted Stock granted
pursuant to Section 3(c) herein.
3. Compensation.
(a) Salary. (1) As payment for the services to be rendered during
the term of this Agreement, Employee shall be entitled to receive a base
salary of One Hundred Thirty Eight Thousand and No/100 Dollars ($138,000) per
year until such time as a Replacement is employed by the Company. Thereafter,
the Employee shall be entitled to receive a base salary of One Hundred
Thousand and No/100 Dollars ($100,000) per year until such time, if any, that
Employee accepts full-time employment with another company. Thereafter,
Employee shall be employed on a part-time basis and shall be entitled to $50
per hour for services rendered. All compensation payable hereunder shall be
paid in accordance with the payroll policies of the Company in effect from
time to time.
(b) Benefits. During the term of this Agreement, the Employee shall
be entitled to participate in all employee benefit and insurance plans
maintained from time to time by the Company for the benefit of its employees,
in accordance with the policies of the Company in effect from time to time.
Notwithstanding, this provision shall exclude Employee's participation in the
Company's 401(k) plan and group-term life insurance plan effective upon the
execution of this Agreement. The Company has previously paid for a $750,000
term life insurance policy for the benefit of the Employee. Such policy shall
remain in effect during the term of the policy. Any future costs to maintain
such policy shall be borne by Employee. The Employee shall continue to accrue
vacation at the Employee's rate of accrual in effect on the effective date of
this Agreement. All such benefit plans are subject to change or termination
from time to time by Company in its sole and absolute discretion.
(c) Restricted Stock. Employee shall receive, in addition to the
salary and employee benefits specified in Section 3(a) and (b) above,
Restricted Stock of the Company, as more fully described and subject to: (i)
the conditions set forth in Exhibit A attached hereto and incorporated by
reference herein and (ii) that certain 1997 Incentive Stock Plan (the "Plan")
of the Company attached hereto as Exhibit B.
(d) Registration Rights. The Company represents that all stock in
the Company which Employee obtains from the vesting of Restricted Stock has
been previously registered pursuant to a Form S-8 previously filed with the
Securities and Exchange Commission.
4. Term; Termination.
(a) The term of this Employment Agreement shall commence on the
first date when Employee reports for work for the Company after the effective
date hereof (the "Effective Date") and shall continue thereafter for a period
of six (6) months, subject to the terms and conditions herein stated; provided
that Employee may terminate this Agreement at any time hereafter by giving the
Company at least fourteen (14) days' prior written notice. If Employee
voluntarily terminates this Agreement, Company shall have no further financial
liability to Employee beyond the effective date of such termination.
(b) If during the term of this Agreement Employee is prevented for a
continuous period of thirty (30) days from performing his duties hereunder by
reason of physical or mental disability ("Disability"), then the Company, on
seven days' prior written notice to the Employee, may terminate this
Agreement. In the event of a termination pursuant to this paragraph 4(b), the
Company shall be relieved of all of its obligations under this Agreement,
except that: (i) the Company shall pay to the Employee that portion of the
Employee's wages earned and accrued by Employee prior to Employee's
termination, and (ii) to the extent provided in the Plan, Employee shall vest
in the Restricted Stock described in Paragraph 3(c) hereof.
(c) The Company may at any time discharge the Employee for Cause (as
hereinafter defined) and terminate this Agreement without any further
liability hereunder to the Employee or his spouse or estate, except for the
obligation of the Company to pay the Employee's wages earned to the date of
discharge. For purposes of this Agreement, the Company shall have "Cause" to
terminate the Employee's employment upon (i) the gross negligence of the
Employee in performing his duties hereunder (other than any such failure
resulting from the Employee's incapacity due to physical or mental illness),
(ii) the willful engaging by the Employee in conduct amounting to fraud or
embezzlement or any other act by Employee which is negligently or willfully
performed which has the effect of damaging the reputation of the Company or
its business, (iii) breach of fiduciary duty as an officer of the Company,
(iv) the violation by the Employee of any material provision of this
Agreement, including but not limited to the provisions of Sections 5, 6, 7, 8
or 10 hereof.
5. Business Opportunities. Subject to the provisions of Paragraph
2(b), for as long as the Employee shall be employed by the Company, the
Employee agrees that with respect to any new and future business opportunity
or other new and future business proposal which is offered to, or comes to the
attention of, the Employee during employment and which is in any way related
to, or connected with, the business of the Company or its affiliates, the
Company shall have the right to take advantage of such business opportunity or
other business proposal for its own benefit. The Employee agrees to promptly
deliver notice to the board of directors of the Company in writing (the
"Notice of Opportunity") of the existence of such opportunity or proposal and
the Employee may take advantage of such opportunity only if the Company does
not elect to exercise its right to take advantage of such opportunity within
thirty (30) days after receipt of the Notice of Opportunity. Thereafter, the
Company shall be deemed to have waived its rights to such opportunity and the
Employee shall have the right to pursue such opportunity upon the terms and
conditions set forth in this Agreement, specifically subject to the terms of
Section 2 of this Agreement.
6. Intellectual Property. Employee hereby assigns to the Company all
inventions, processes, discoveries and improvements (whether or not
patentable) which are conceived, made or learned by Employee alone or jointly
with others in the course of his employment with the Company that pertain to
the business interests of the Company or relating to areas which may be
reasonably anticipated to be encompassed by such business interests of the
Company at the time of conception. Employee at any time during or after his
employment will promptly disclose to the Company all such processes,
inventions, discoveries or improvements assigned hereby. Employee will also,
at the Company's expense, cooperate in all lawful acts which may be necessary
or desirable in the judgment of the Company to protect or vest title to such
inventions, processes, discoveries or improvements in the Company or its
nominee including, without limitation, applying for, obtaining, maintaining,
and enforcing patents thereon in all countries of the world, and including
execution of papers appropriate thereto.
7. Confidential Information. The Employee acknowledges that he will
receive or come in contact with, among other things, trade secrets (both
technical and non-technical), know-how, lists of customers, suppliers,
contractors, customers, employee records and other confidential and
proprietary information about the business of the Company (hereinafter
collectively referred to as "information"), all of which the Company considers
highly confidential, giving the Company significant advantage over
competitors, and which the Company desires to protect. The Employee
understands that such information is the sole property of the Company, and
that the information is confidential, and he agrees that both during and after
his employment with the Company he will not at any time use or reveal such
information to anyone except as permitted by the Company or required by
Employee's employment duties with the Company. The employee shall have no
obligation under this Agreement with respect to Confidential Information which
is or becomes publicly available without breach of this Agreement by Employee.
Upon termination of employment hereunder, the Employee agrees to surrender to
the Company all papers, documents, writings and other property produced by him
or coming into his possession by or through his employment hereunder, and the
Employee agrees that all such materials and information will at all times
remain the property of the Company.
8. Restrictive Covenant. In consideration of $10 and other good and
valuable separate consideration given by Company to Employee, Employee agrees
that during the period of time that the Employee is employed by the Company
and for a period of two (2) year(s) following the termination of this
Agreement for any reason, the Employee shall not, except as expressly approved
in writing by the Board of Directors of the Company, directly or indirectly:
(a) (i) cause or be instrumental in the formation of, or
(ii) within any state in which the Company then conducts
business engage in, whether as principal, agent, trustee,
member or employee or through the agency of any
corporation, partnership, association, agent or agency,
any business competitive with the business then conducted by the Company or
its subsidiaries or affiliates (a "Competing Business");
(b) be the owner of more than one percent (1%) of the equity
(whether capital stock, membership or partnership interests) of any entity
(except for stock publicly traded on any recognized stock exchange) which is
engaged, directly or indirectly, in a Competing Business; or
(c) through any person, firm, association or corporation with which
he is now or may hereafter become associated, cause or induce any present or
future employee of the Company to leave the employ of the Company or to accept
employment with the Employee or with any Competing Business.
The foregoing agreement not to compete shall not be held invalid or
unenforceable because of the scope of the territory or actions subject thereto
or restricted thereby, or the period of time within which such agreement is
operative, but any judgment of a court of competent jurisdiction may define
the maximum territory and actions subject to and restricted by this Section 8
and the period of time during which such agreement is enforceable. In the
event the Company shall cease to do business, this Section 8 shall not apply.
9. Specific Performance; Survival. The Employee acknowledges that a
remedy at law for any breach or attempted breach of Sections 5, 6, 7 or 8 of
this Agreement will be inadequate, agrees that the Company shall be entitled
to specific performance and injunctive and other equitable relief in case of
any such breach of attempted breach, and further agrees to waive any
requirement for the securing or posting of any bond in connection with the
obtaining of any such injunctive or any other equitable relief. The Parties
hereto acknowledge that the covenants contained in Sections 5, 6, 7, 8 and 9
shall survive the termination of this Agreement, by either party, for any
reason.
10. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such provision or invalidity only, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
11. Binding Effect. This Agreement shall be binding on the parties
hereto when executed by Employee and the Chief Executive Officer of Company.
Employee acknowledges and agrees that no representative of Company other than
the Chief Executive Officer has any authority to enter into any employment
contract or bind Company unless authorized in writing by the Chief Executive
Officer of Company to do so.
12. Utah Law to Apply; Arbitration. This Agreement shall be governed
by and construed pursuant to the laws of the State of Utah, notwithstanding
conflicts of laws principles thereof. Company and Employee hereby submit to
the jurisdiction of the courts, mediations and arbitral panels located in, and
agree that venue shall lie for all purposes in Xxxxx, County, Utah. Except for
actions involving requests by Company for relief under paragraph 9 hereof,
Employee and Company hereby knowingly and voluntarily agree that any disputes
or conflicts in any way arising out of or relating to the employment relation
between Employee and Company created by this agreement shall be mediated or
arbitrated, at the written election of either party hereto. If either
Employee or Company make a proper election to mediate under this paragraph 12,
but such mediation efforts fail to resolve the subject dispute(s) between the
parties, the parties shall be bound to resolve the subject dispute(s) by
binding arbitration. Where the subject dispute(s) are ultimately resolved by
arbitration, the parties hereto irrevocably agree to be bound by all findings
of fact and conclusions of law of the arbitrator(s) selected. Either party
may elect under this paragraph 12 to proceed either to mediation or
arbitration by delivery of written notice to the opposing Party and to the
Judicial Arbitration and Mediation Services office where such proceeding is to
be held. Each mediation or arbitration proceeding hereunder will be conducted
in accordance with the rules of the Judicial Arbitration and Mediation
Services (the "JAMS Rules"), including selection of mediator(s) or
arbitrator(s). The mediation or arbitration will be held in Layton, Utah,
unless both parties agree to another location. All federal and state laws
applicable to this agreement relating to arbitration or mediation of conflicts
shall be fully complied with by the parties.
13. Notices. Any notices required by this Agreement shall be
effectively given if given in writing by personal delivery or by depositing
same in the United States mail, registered or certified, postage prepaid,
return receipt requested. For purposes of this provision, Company's address
shall be 000 Xxxxxxxx Xxxx Xxxx, xxxxx 000, Xxxxxx, Xxxx 00000, or at such
other place as may be designated by Company from time to time. Employee's
address shall be employees home address or at such other place as may be
designated by Employee from time to time.
14. Assignment. This Agreement may not be assigned by the Employee.
Neither the Employee, his spouse nor their estates shall have any right to
commute, encumber or dispose of any right to receive payments hereunder, it
being that such payments and the right thereto are nonassignable and
nontransferable.
15. Entire Agreement. This Agreement, together with all exhibits and
attachments hereto and all documents and instruments executed and delivered in
connection herewith, constitutes the entire agreement of the parties hereto,
and supersedes all prior understandings with respect to the subject matter
hereof.
16. Acknowledgment. Employee acknowledges that he has read and
understands this Agreement, and that he has received a fully executed copy of
same.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the Effective Date.
THE COMPANY:
COMPUTERIZED THERMAL IMAGING, INC.
/s/Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx, Chairman and CEO
THE EMPLOYEE:
/s/Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx, Individually
Exhibits A - CTI Restricted Stock Agreement
B - 1997 Incentive Stock Plan
EXHIBIT "A"
Computerized Thermal Imaging, Inc.
Employee Restricted Stock Agreement
Pursuant to that certain Employment Agreement (the "Employment Agreement")
effective as of February 1, 2001 between Computerized Thermal Imaging, Inc.
(the "Company") and Xxxxx X. Xxxxxxx (the "Employee"), the Company hereby
grants to Employee, subject to all terms and conditions of the Employment
Agreement, this Employee Restricted Stock Agreement, and that certain
Computerized Thermal Imaging, Inc. 1997 Stock Option and Restricted Stock Plan
(the "Plan") of the Company, a copy of which is attached hereto and
incorporated by reference herein for all purposes, fifty thousand (50,000)
shares of (the "Shares") of the Company's Common Stock, $0.001 par value per
share.
Subject to forfeiture as hereafter provided, the Restricted Stock granted
herein becomes vested on August 1, 2001. Upon vesting, Employee shall have
full rights and ownership in Restricted Stock, which shall no longer be
subject to any further restrictions whatsoever.
The Restricted Stock shall be forfeited if, as, and when Employee's employment
with the Company is terminated by the Company for Cause (as defined in the
Employment Agreement) or is voluntarily terminated by the Employee prior to
August 1, 2001.
If, as, and when Employee desires to have registered free-trading common stock
shares issued from his Restricted Stock Account to be maintained by the
Company in accordance with the Plan, he may do so by delivering written notice
of such desire to the Company at its offices in Layton, Utah, together with
appropriate payment for the Employee's portion of applicable payroll taxes due
to the Company for the issuance of such shares.
The Employee hereby accepts and agrees to be bound by all the terms and
conditions of the Plan, to which these Restricted Shares are subject.
Computerized Thermal Imaging, Inc.
By /s/Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx, Chairman and CEO
Granted as of the first day of February, 2001.
/s/Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx, Individually
Exhibit B - CTI 1997 Stock Option Plan
