EMPLOYMENT AGREEMENT
EXHIBIT
10.75
THIS
EMPLOYMENT AGREEMENT is dated as of August 30, 2007, between
Imaging Diagnostic Systems, Inc., a Florida corporation (the
"Company"), and Xxxxx X. Xxxxxxxx (the
"Executive").
WITNESSETH:
WHEREAS,
The Company is engaged in the business of developing laser-based
medical optical imaging devices; and
WHEREAS,
the
Company
has the intent to market and sell its products and services to clients and
potential clients throughout the world; and
WHEREAS,
the Company
wishes to continue to employ the Executive as its Executive Vice-President
and
Chief Financial Officer, charged with all the responsibilities and duties
legally required by the State of Florida and to oversee various broad and
specific aspects of its business; and
WHEREAS,
in the course of the Executive’s employment, the Executive will continue to have
access to and acquire knowledge of valuable trade secrets, confidential
information and other proprietary information belonging and relating to the
Company and its business, and which the Company has a legitimate interest
in
protecting; and
WHEREAS,
the Company and Executive are willing to continue the employment, subject
to the
terms and conditions contained in this Employment Agreement (the
“Agreement”);
NOW,
THEREFORE, in consideration of the premises and the mutual covenants
set forth in this Agreement, and intending to be legally bound, the Company
and
the Executive agree as follows:
1. EMPLOYMENT. The
Company hereby continues the employment of the Executive and the Executive
hereby accepts employment upon the terms and condition hereinafter set
forth.
2. TERM
& TERMINATION.
(a) Term.
The Company hereby continues the employment of the Executive, and the Executive
hereby accepts employment with the Company, for a period commencing on August
30, 2007, and ending one year from that date (the "Term"). All Company
obligations under this Agreement shall cease upon its termination, except
for
those stock options which have been vested.
(b) Termination
without Cause. The Company may terminate the
Executive’s employment without cause. Such termination will become
effective upon the date specified in the termination notice, provided that
such
date is at least 60 days from the date of such notice. In the event
of such termination without cause:
(i) For
the remainder of the Term following the effective date of termination, the
Company will continue to pay the Executive his salary pursuant to Section
3(a).
(ii) The
Company will continue to maintain for the remainder of the Term following
the
effective date of termination, for the benefit of the Executive, the employee
benefit programs referred to in Section 3(b) as in effect on the date of
termination.
(iii) On
the effective date of termination, all options that were scheduled to vest
will
vest and will remain exercisable for a period of three years from the date
of
termination.
(c) Termination
for Cause. The Company may terminate the Executive’s employment
at any time for cause by giving written notice of termination setting forth
such
cause. Such termination shall become effective upon the giving of
such notice, except that, where the basis for cause is capable of cure within
30
days, termination based upon cause shall not become effective unless Executive
shall fail to complete such cure within 30 days of receipt of written notice
of
the existence of such cause. Upon such termination the Executive shall have
no
right to compensation, commission, bonus, benefits or reimbursement pursuant
to
this Agreement, for any period subsequent to the effective date of
termination. Further, upon termination for cause, all of the
Executive’s unvested stock options shall terminate. For purposes of this
section, “cause” shall mean; (1) the Executive is convicted of a felony; (2) the
Executive, in carrying out his duties hereunder, commits gross negligence
or
willful misconduct resulting, in either case, in material harm to the Company;
(3) the Executive misappropriates Company funds or otherwise defrauds the
Company; (4) the Executive materially breaches any provision of this Agreement;
or (5) the Executive materially fails to perform his duties under section
4.
(d) Death
or Disability. Upon the death or disability of the Executive, the
Executive shall be entitled to and the Company will pay the Executive’s salary
from the date of death or from the date of disability through the end of
the
Term. (For purposes of this Section, “disability” shall mean that for a period
of six months in any 12-month period the Executive is incapable of substantially
fulfilling his duties because of physical, mental or emotional incapacity
arising from injury, sickness or disease.) Should the Executive be
rendered disabled, the Company will continue to maintain for the benefit
of the
Executive the employee benefit programs referred to in Section 3(b) that
were in
effect on the date of the disability.
(e) Special
Termination. In the event that (i) the Company materially
breaches this Agreement or the performance of its duties and obligations
hereunder; or (ii) any entity or person not now an executive officer of the
Company becomes either individually or as part of a
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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
2(b) hereof, in which event the Executive shall be entitled to the compensation
provided for in Section 2(b).
(f) Voluntary
Termination. The Executive, on 30 days prior written notice to the Company,
may terminate his employment voluntarily. Upon such termination, the
Company will pay the Executive’s compensation through the date of such
termination. After such date, the Executive shall no longer be
entitled to receive any compensation, reimbursement or benefits and all unvested
stock options shall terminate upon termination of the Executive’s
employment.
(g) Continuing
Effect. Notwithstanding any termination of this
Agreement at the end of the Term or otherwise, the provisions of Sections
6 - 11
shall remain in full force and effect and the provisions of these Sections
shall
be binding upon the legal representatives, heirs, successors and assigns
of the
Executive.
3. COMPENSATION.
(a) The
Company will continue to pay the Executive an annual base salary of $192,400
per
annum in equal semi-monthly installments.
(b) During
the term of his employment, the Executive shall be entitled to participate
in
employee benefits plans or programs of the Company, if any, to the extent
the
Executive is eligible to participate thereunder, including the Comprehensive
Group Insurance Program maintained by the Company, paid by the Company for
the
Executive and his spouse, except for the appropriate employee and spouse
portion.
(c) The
Company shall provide the Executive with a $500 per month car allowance and
a
cellular phone and major credit card for use on Company business.
(d) The
Executive shall receive an option to purchase up to an aggregate of 250,000
shares of the Company’s common stock at an exercise price of $.058 per share
pursuant to the Company’s standard form of stock option
agreement. The option shall vest one year from the date of this
Agreement, provided that the Executive remains employed by the Company through
that time, except to the extent that earlier vesting is provided under specified
circumstances as set forth elsewhere in this Agreement or in the Company’s
applicable form of stock option agreement.
(e) The
Executive will be entitled to nine paid holidays and six weeks of vacation
for
each 12-month period without loss of compensation or other benefits to which
he
is entitled under this Agreement, to be taken at such times as the Executive
may
select and the affairs of the Company may permit.
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4. DUTIES.
(a) General
Duties. The Executive shall be employed as the Executive
Vice-President and Chief Financial Officer, with duties and responsibilities
that are customary for such position, subject to the direction of the CEO
and as
directed by the Company’s by-laws. The Executive will use the
standard of care befitting of such an executive in performing duties and
in
discharging responsibilities pursuant to this Agreement, which duties and
responsibilities shall be discharged competently, carefully, and
faithfully.
(b) Corporate
Code of Conduct. The Executive agrees to adhere to the Company’s
Corporate Code of Conduct.
(c) Extent
of Services. The Executive will devote all of his time, attention
and energies during normal business hours (exclusive of periods of sickness
and
disability and of such normal holiday and vacation periods as have been
established by the Company) to the affairs of the Company. The
Executive will not enter the employ of, or serve as a consultant to, or in
any
way perform any services with or without compensation to any person, business
or
organization without the prior consent of the board of directors of the Company;
provided, that the Executive shall be permitted to devote a limited amount
of
time, without compensation, to charitable or similar organizations.
5. PLACE
OF PERFORMANCE. The Executive hereby
acknowledges that the Company’s existing and potential clients are located
throughout the world and that the Company is actively engaged in marketing
and
selling its products and services to such clients throughout the
world.
6. NON-DISCLOSURE
OF CONFIDENTIAL INFORMATION. The
Executive acknowledges that, during his employment, he will learn and will
have
access to confidential information regarding the Company and its affiliates,
including without limitation (i) proprietary or secret plans, designs,
processes, programs, documents, software, agreements or material relating
to the
business, products, services or activities of the Company and its affiliates
and
(ii) market reports, customer investigations, clinical data, scientific or
engineering research, customer lists and/or similar information that is
proprietary information of the Company or its affiliates (collectively,
“Confidential Business and Technical Information”). The Executive
recognizes and acknowledges that the Confidential Business and Technical
Information, as it may exist from time to time, represents valuable, special
and
unique assets of the Company access to and knowledge of which are essential
to
the performance of the Executive’s duties hereunder.
The
Executive will not, during or after the term of his employment by the Company,
in whole or in part, disclose any such Confidential Business and Technical
Information to any person, firm, corporation, association or entity for any
reason or purpose whatsoever, nor shall the Executive make use of any such
Confidential Business and Technical Information for his own purposes or for
the
benefit of any person, firm, corporation or entity except the Company under
any
circumstances during or after the term of his employment,
4
provided
that after the term of his employment these restrictions shall not apply
to such
secrets, information and processes which are then in the public domain provided
that the Executive was not responsible, directly or indirectly, for such
secrets, information or processes entering the public domain without the
Company’s consent.
In
the
event an action is instituted and prior knowledge is an issue, it shall be
the
obligation of the Executive to prove by clear and convincing evidence that
the
Confidential Business and Technical Information disclosed was in the public
domain, was already known by the recipient, or was developed independently
by
the recipient. The Executive agrees to hold as the Company’s property
all memoranda, books, papers, letters, formulas and other data, and all copies
thereof and therefrom, in any way containing Confidential Business and Technical
Information or otherwise relating to the Company’s business and affairs, whether
made by him or otherwise coming into his possession, and upon termination
of his
employment, or on demand of the Company, at any time, to deliver the same
to the
Company.
7. NON-COMPETITION
AGREEMENT.
(a) The
Executive acknowledges and agrees that, pursuant to Florida Statutes Section
542.335, based on having access to and acquiring knowledge of highly sensitive
and valuable trade secrets, and confidential or proprietary information
belonging or relating to the Company, the Executive would be in a position
to
cause serious and irreparable harm to the Company in the event that, following
the termination of his employment hereunder, the Executive were to compete
with
or be involved in an enterprise which competes with the Company, engages
in the
same business as the Company, or performs research and development in the
field
of medical optical imaging.
(b) Until
termination of his employment and for a period of 24 months commencing on
the
date of termination, the Executive, directly or indirectly, in association
with
or as a stockholder, director, officer, consultant, executive, partner, joint
venturer, member or otherwise of or through any person, firm, corporation,
partnership, association or entity, covenants that the Executive will not
compete with the Company or any of its affiliates in the design, manufacture,
construction, offer, sale or marketing of products or services that are
competitive with the products or services offered by the Company during such
period, within the United States or anywhere in the world. The
Executive covenants and agrees that during his employment and for a period
of 24
months immediately following the termination of such employment, the Executive
will not, either individually or in partnership or jointly or in conjunction
with any person, firm, business, corporation, partnership, joint venture,
entity, syndicate or association, as an executive, principal, agent, officer,
director, consultant, advisor, distributor, dealer, contractor, trustee,
lender,
shareholder or in any manner or capacity whatsoever, directly or indirectly,
be
employed by, render services to, carry on or be engaged in, or be concerned
with
or be interested in or advise, lend money to, guarantee the debts or obligations
of, or in any manner participate in the management, operation or control
of any
business which is directly competitive with the business of the Company,
engages
in the same business as the Company or performs research and development
in the
medical optical imaging field with any entity located anywhere in the
world.
5
(c) For
the purposes of this paragraph a business shall be deemed to be in “direct
competition” or “directly competitive” with the Company if such business is
engaged in developing, manufacturing, marketing, selling, or distributing
medical optical imaging devices.
8. NON-SOLICITATION. The
Executive covenants and agrees that while he is employed by the Company and
for
a period of 24 months immediately following the termination of such employment,
he will not, directly or indirectly, in any manner whatsoever, on his own
behalf, or on behalf of any person, firm, business, corporation, partnership,
joint venture, entity, syndicate or association solicit, induce or cause,
or
attempt to induce or cause, any person who is then an employee of or consultant
to the Company to cease providing services to the Company.
9. REASONABLENESS
OF CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION OBLIGATION AND
COVENANTS.
(a) The
Executive hereby acknowledges and confirms that the obligations and covenants
set out in the above paragraphs are reasonable and necessary to protect the
legitimate interests of the Company. Without limiting the generality
of the foregoing, the Executive hereby acknowledges and confirms that given,
among other things, the nature and international scope of the Company’s
operations and of the employment duties to be performed by the Executive
hereunder, the geographic scope and duration of the restrictions set forth
above
are reasonable and necessary to protect the legitimate interests of the
Company.
(b) The
Executive further acknowledges and agrees that these obligations and covenants
will not preclude him from becoming gainfully employed following their
termination of his employment in his profession.
10. INVENTIONS.
(a) The
Executive hereby sells, transfers and assigns to the Company or to any person
or
entity designated by the Company, all of the entire right, title and interest
of
the Executive in and to all inventions, ideas, disclosures and improvements,
whether patented or unpatented, and copyrightable material, made or conceived
by
the Executive, solely or jointly, in whole or in part, during the term hereof
which (i) relate to methods, apparatus, designs, products, processes or devices
sold, leased, used or under construction or development by the Company or
any
subsidiary, or (ii) otherwise relate to or pertain to the business, functions
or
operations of the Company or any subsidiary, or (iii) arise wholly or partly
from the efforts of the Executive during the term hereof. The
Executive shall communicate promptly and disclose to the Company, in such
form
as the Company requests, all information, details and data pertaining to
the
aforementioned inventions, ideas, disclosures and improvements; and, whether
during the term hereof or thereafter, the Executive shall execute and deliver
to
the Company such formal transfers and assignments and such other papers and
documents as may be required of the Executive at the Company’s expense to permit
the Company or any person or entity designated by the Company to file and
prosecute the patent applications and, as to copyrightable material, to obtain
copyright thereon. Any invention made by the Executive within one
year following the
6
termination
of employment shall be deemed to fall within the provisions of this Section
unless proven by the Executive to have been first conceived and made following
such termination.
(b) No
Payment. The Executive acknowledges and
agrees that no separate or additional payment or compensation will be required
to be made to him in consideration of his undertakings in this
Section.
11. EQUITABLE
RELIEF.
(a) The
Company and the Executive recognize that the services to be rendered under
this
Agreement by the Executive are special, unique and of extraordinary character,
and that in the event of the breach by the Executive of the terms and conditions
of this Agreement or if the Executive, without the prior consent of the Board
of
Directors of the Company, shall leave his employment for any reason and take
any
action in violation of Section 6, Section 7 or Section 8, the Company will
be
entitled to institute and prosecute proceedings in any court of competent
jurisdiction referred to in Section 11(b) below, to enjoin the Executive
from
breaching the provisions of Section 6, Section 7, or Section 8. In
such action, the Company will not be required to plead or prove irreparable
harm
or lack of an adequate remedy at law. Nothing contained in this
Section 11 shall be construed to prevent the Company from seeking such other
remedy as the Company may elect in any arbitration proceeding based on any
breach of this Agreement by the Executive.
(b) Any
proceeding or action for equitable relief must be commenced in state court
in
Broward County, Florida. The Executive and the Company irrevocably
and unconditionally submit to the jurisdiction of such court and agree to
take
any and all future action necessary to submit to the jurisdiction of such
court. The Executive and the Company irrevocably waive any objection
that they now have or hereafter may have to the laying of venue of any suit,
action or proceeding brought in such court for equitable relief and further
irrevocably waive any claim that any such suit, action or proceeding brought
in
such court has been brought in an inconvenient forum.
12. ASSIGNMENT. The
rights and obligations of the Company under this Agreement shall inure to
the
benefit of and be binding upon the successors and assigns of the Company,
provided that any such successor or assign shall acquire all or substantially
all of the assets and business of the Company. The Executive's
obligations hereunder may not be assigned or alienated and any attempt to
do so
by the Executive will be void.
13. SEVERABILITY.
(a) The
Executive expressly agrees that the character, duration and geographical
scope
of the provisions set forth in this Agreement are reasonable in light of
the
circumstances, as they exist on the date hereof. Should a decision,
however, be made at a later date by a court of competent jurisdiction that
the
character, duration or geographical scope of such provisions is unreasonable,
then it is the intention and the agreement of the Executive and the Company
that
this Agreement shall be construed by the court in such a manner as to impose
only those restrictions on the Executive's conduct that are reasonable in
the
light of the
7
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.
14. NOTICES
AND ADDRESSES. All notices,
offers, acceptance and any other acts under this Agreement (except payment)
shall be in writing, and shall be sufficiently given if delivered to the
addressee in person, by Federal Express or similar receipted delivery, by
facsimile delivery or, if mailed, postage prepaid, by certified mail, return
receipt requested, as follows:
To
the
Company: Imaging
Diagnostic Systems, Inc.
0000
X.X.
00xx
Xxxxx
Xxxxxxxxxx,
Xxxxxxx 00000
To
the
Executive: Xxxxx
X. Xxxxxxxx
0000
X.X.
00xx
Xxxxx
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.
15. COUNTERPART. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which together shall constitute one and the
same
instrument. The execution of this Agreement may be by actual or
facsimile signature.
16. ARBITRATION. Except
for any controversy or claim seeking equitable relief as provided in Section
11
of this Agreement, any controversy or claim arising out of or relating to
this
Agreement, or to the interpretation, breach or enforcement thereof or any
other
dispute between the parties, shall be submitted to one arbitrator and settled
by
arbitration in Fort Lauderdale, Florida, in accordance with the commercial
arbitration rules of the American Arbitration Association in effect at such
time. Any award made by such arbitrator shall be
final,
8
binding
and conclusive on all parties hereto for all purposes, and judgment may be
entered thereon in any court having jurisdiction thereof.
17. ATTORNEYS
FEES. In the event that there is any
controversy or claim arising out of or relating to this Agreement, or to
the
interpretation, breach or enforcement thereof, and any action or proceeding
is
commenced to enforce the provisions of this Agreement, whether through
litigation or arbitration, the prevailing party shall be entitled to recover
from the non-prevailing party his/its reasonable attorney’s fees, costs and
expenses incurred at all levels.
18. GOVERNING
LAW. This Agreement and any
dispute, disagreement, or issues of construction or interpretation arising
hereunder whether relating to its execution, its validity, the obligations
provided therein or performance shall be governed or interpreted according
to
the internal laws of the State of Florida without regard to choice of law
considerations.
19. ENTIRE
AGREEMENT. This Agreement constitutes
the entire Agreement between the parties and supersedes all prior oral and
written agreements between the parties with respect to the subject matter
hereof. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, except by a statement in
writing signed by the party or parties against whom enforcement or the change,
waiver, discharge or termination is sought.
20. ADDITIONAL
DOCUMENTS. The parties hereto shall
execute and deliver such additional instruments as may be reasonably required
in
order to carry out the purpose and intent of this Agreement and to fulfill
the
obligations of the parties hereunder.
21. SECTION
AND PARAGRAPH HEADINGS. The section and
paragraph headings in this Agreement are for reference purposes only and
shall
not affect the meaning or interpretation of this Agreement.
22. WAIVER
OF BREACH. A waiver by the Company or
the Executive of a breach of any provision of the Agreement by the other
party
shall not operate or be construed as a waiver of any subsequent breach by
the
other party.
IN
WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the 30th day of August, 2007.
|
IMAGING
DIAGNOSTIC SYSTEMS, INC.
By:
/s/ X. X. Xxxxxx
Xxx
Xxxxxx, Chief Executive Officer
|
EXECUTIVE
/s/
Xxxxx X. Xxxxxxxx
Xxxxx
X. Xxxxxxxx
|
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STOCK
OPTION AGREEMENT
(2007
Non-Statutory Stock Option Plan)
Imaging
Diagnostic Systems, Inc. (the “Company”), desiring to afford an
opportunity to the Grantee named below to purchase certain shares of common
stock of the Company (the “Common Stock”) to provide the Grantee with an added
incentive as an employee of the Company, hereby grants to Grantee, and the
Grantee hereby accepts, an option to purchase the number of such shares optioned
as specified below, during the term ending at midnight (prevailing local
time at
the Company’s principal offices) on the expiration date of this Option specified
below, at the option exercise price specified below, subject to and upon
the
following terms and conditions:
1. Identifying
Provisions. As used in this Option, the
following terms shall have the following respective meanings.
(a) Grantee: Xxxxx
X. Xxxxxxxx;
(b) Date
of grant: August 30, 2007;
(c) Number
of shares optioned: 250,000;
(d) Option
exercise price per share: $.058;
(e) Expiration
Date: August 30, 2017;
(f) Plan: The
Company’s 2007 Non-Statutory Stock Option Plan; and
|
|
(g)
|
Committee: The
stock option committee of the Company’s Board of Directors, or if none,
the Board of Directors.
|
This
Option is not intended to be an incentive stock option pursuant to Section
422
of the Internal Revenue Code.
2. Vesting.
This
Option shall vest and become exercisable on the following date(s) in the
following amount(s):
|
Vesting
Date
|
Number
of Shares
|
|
August
30, 2008
|
250,000
|
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3. Restrictions
on Exercise. The following additional
provisions shall apply to the exercise of this Option:
(a) Termination
of Employment. If the Grantee’s employment by the Company or any
of its subsidiaries is terminated for any reason other than death, only that
portion of this Option exercisable at the time of such termination of employment
may thereafter be exercised, and it may not be exercised after the earlier
of
(i) three years after such termination or (ii) the Expiration Date.
(b) Death
of Grantee. If the Grantee shall die during the term of this
Option, the Grantee’s legal representative or representatives, or the person or
persons entitled to do so under the Grantee’s last will and testament or under
applicable intestate laws, shall have the right to exercise this Option,
but
only for the number of shares as to which the Grantee was entitled to exercise
this Option in accordance with Section 2 hereof on the date of his death,
and
such right shall expire and this Option shall terminate three years after
the
date of the Grantee’s death or on the expiration date of this Option, whichever
date is sooner.
(c) Continuity
of Employment. This Option shall not be exercisable by the
Grantee in any part unless at all times beginning with the date of grant
and
ending no more than three years prior to the date of exercise, the Grantee
has,
except for military service leave, sick leave or other bona fide leave of
absence (such as temporary employment by the United States Government) been
in
the continuous employ of the Company.
4. Non-Transferable. The
Grantee may not transfer this Option except by will or the laws of descent
and
distribution. This Option shall not be otherwise transferred, assigned, pledged,
hypothecated or disposed of in any way, whether by operation of law or
otherwise, and shall be exercisable during the Grantee’s lifetime only by the
Grantee or his guardian or legal representative.
5. Adjustments
and Corporate Reorganization. Subject to any
required action by the shareholders of the Company, the number of shares
covered
by the Option, as well as the exercise price per share of the Option, shall
be
proportionately adjusted for any increase or decrease in the number of issued
shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase
or
decrease in the number of issued shares of Common Stock effected without
receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof
shall
be made with respect to, the number or price of shares subject to the
Option.
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In
the
event of the proposed dissolution or liquidation of the Company, the Option
will
terminate immediately prior to the consummation of such proposed action,
unless
otherwise provided by the Committee. The Committee may, in the
exercise of its sole discretion in any such instance, declare that the Option
shall terminate as of a date fixed by the Committee and give Grantee the
right
to exercise his Option as to all or any part of the Option, including shares
as
to which the Option would not otherwise be exercisable. In the event
of the proposed sale of all or substantially all of the assets of the Company,
or the merger of the Company with or into another corporation in a transaction
in which the Company is not the survivor, the Option shall be assumed or
an
equivalent option shall be substituted by such successor corporation or a
parent
or subsidiary of such successor corporation, unless the Committee determines,
in
the exercise of its sole discretion and in lieu of such assumption or
substitution, that the Grantee shall have the right to exercise the Option
as to
all of the optioned stock, including shares as to which the Option would
not
otherwise be exercisable. If the Committee makes an Option fully
exercisable in lieu of assumption or substitution in the event of such a
merger
or sale of assets, the Committee shall notify the Grantee that the Option
shall
be fully exercisable for a period of 30 days from the date of such notice,
and
the Option will terminate upon the expiration of such period.
6. Exercise,
Payment For and Delivery of Stock. This
Option may be exercised by the Grantee or other person then entitled to exercise
it by giving four business days’ written notice of exercise to the Company
specifying the number of shares to be purchased and the total purchase price.
The exercise price shall become immediately due upon exercise of the Option
and
shall be payable in one of the following alternative forms specified
below:
(a) full
payment in cash or check drawn to the Company’s order;
(b) full
payment in shares of Common Stock held for at least six months and valued
at
fair market value on the Exercise Date (as such term is defined
below);
(c) full
payment through a combination of shares of Common Stock held for at least
six
months and valued at fair market value on the Exercise Date and cash or check;
or
(d) full
payment through a broker-dealer sale and remittance procedure provided that
sale
of the optioned stock is permitted as a result of an effective registration
statement under the Securities Act of 1933, as amended, and Grantee complies
with all applicable securities laws, pursuant to which the Grantee (i) shall
provide irrevocable written instructions to a Company-designated brokerage
firm
to effect the immediate sale of the purchased shares and remit to the Company,
out of the sale proceeds available on the settlement date, sufficient funds
to
cover the aggregate exercise price payable for the purchased shares plus
all
applicable Federal and State income taxes required to be withheld by the
Company
in connection with such purchase and (ii) shall provide written directives
to
the Company to deliver the certificates for the purchased shares directly
to
such brokerage firm in order to complete the sale transaction.
For
purposes of this section 6, the Exercise Date shall be the date on which
written
notice of the Option exercise is delivered to the Company. Except to
the extent the sale and remittance
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procedure
is utilized in connection with the exercise of the Option, payment of the
exercise price for the purchased shares must accompany such notice.
The
fair
market value per share of Common Stock on any relevant date shall be determined
in accordance with the following provisions:
(i) If
the Common Stock is not at the time listed or admitted to trading on any
national stock exchange but is traded on The NASDAQ National Market, the
fair
market value shall be the closing selling price per share of Common Stock
on the
date in question, as such price is reported by the National Association of
Securities Dealers on The NASDAQ National Market or any successor
system. If there is no reported closing selling price for the Common
Stock on the date in question, then the closing selling price on the last
preceding date for which such quotation exists shall be determinative of
fair
market value.
(ii) If
the Common Stock is at the time listed or admitted to trading on any national
stock exchange, then the fair market value shall be the closing selling price
per share of Common Stock on the date in question on the stock exchange
determined by the Committee to be the primary market for the Common Stock,
as
such price is officially quoted in the composite tape of transactions on
such
exchange. If there is no reported sale of Common Stock on such
exchange on the date in question, then the fair market value shall be the
closing selling price on the exchange on the last preceding date for which
such
quotation exists.
(iii) If
the Common Stock is quoted on The NASDAQ Capital Market or any similar system
of
automated dissemination of quotations of securities in common use, the fair
market value shall be the mean between the closing bid and asked quotations
for
the Common Stock on such date.
(iv) If
neither clause (i), (ii) or (iii) is applicable, then the fair market value
shall be the mean between the closing bid and asked quotations for the Common
Stock as reported by the National Quotation Bureau, Inc., if at least two
securities dealers have inserted both bid and asked quotations for Common
Stock
on at least five of the ten preceding business days.
(v) If
none of clauses (i) – (iv) is applicable then the fair market value shall be
determined by the Committee.
7. Rights
in Shares Before Issuance and
Delivery. No person shall be entitled
to the privileges of stock ownership in respect of any shares issuable upon
exercise of this Option unless and until such shares have been issued to
such
person as fully paid shares.
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8. Requirements
of Law and of Stock Exchanges. By
accepting this Option, the Grantee represents and agrees for himself and
his
transferees by will or the laws of descent and distribution that, unless
a
registration statement under the Securities Act of 1933 is in effect as to
shares purchased upon any exercise of this Option, (i) any and all shares
so
purchased shall be acquired for his personal account and not with a view
to or
for sale in connection with any distribution, and (ii) each notice of the
exercise of any portion of this Option shall be accompanied by a representation
and warranty in writing, signed by the person entitled to exercise the same,
that the shares are being so acquired in good faith for his personal account
and
not with a view to or for sale in connection with any distribution.
No
certificate or certificates for shares of stock purchased upon exercise of
this
Option shall be issued and delivered unless and until, in the opinion of
counsel
for the Company, such securities may be issued and delivered without causing
the
Company to be in violation of or incur liability under any federal, state
or
other securities law, any requirement of any securities exchange listing
agreement to which the Company may be a party, or any other requirement of
law
or of any regulatory body having jurisdiction over the Company.
9. Stock
Option Plan. This Option is subject to,
and the Company and the Grantee agree to be bound by, all of the terms and
conditions of the Plan, as the same shall have been amended from time to
time in
accordance with the terms thereof, provided that no such amendment shall
deprive
the Grantee, without his consent, of this Option or any of his rights hereunder.
Pursuant to the Plan, the Committee is vested with final authority to interpret
and construe the Plan and this Option and is authorized to adopt rules and
regulations for carrying out the Plan. A copy of the Plan in its present
form is
available for inspection during business hours by the Grantee or other persons
entitled to exercise this Option at the Company’s principal office. The Plan, as
amended from time to time, is hereby incorporated by reference.
10. Notices. Any
notice to be given to the Company shall be addressed to the Company in care
of
its Secretary at its principal office, and any notice to be given to the
Grantee
shall be addressed to him at the address given beneath his signature hereto
or
at such other address as the Grantee may hereafter designate in writing to
the
Company. Any such notice shall be deemed duly given when actually delivered
by
hand, facsimile, certified or registered mail or recognized overnight
courier.
11. Conflict
with Employment Agreement. In the event
that any provision of this Option Agreement is inconsistent with a provision
of
an employment agreement between the Grantee and the Company, the employment
agreement provision shall govern and supersede the inconsistent provision
of
this Agreement.
12. Laws
Applicable to Construction. This Agreement has
been executed and delivered by the Company in the State of Florida, and this
Agreement shall be construed and enforced in accordance with the laws of
said
State.
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IN
WITNESS WHEREOF, the Company has granted this Option on August 30,
2007.
|
IMAGING
DIAGNOSTIC SYSTEMS, INC.
/s/
X. X. Xxxxxx
By:
Xxxxxxx X. Xxxxxx, Chief Executive Officer
|
GRANTEE
/s/
Xxxxx X. Xxxxxxxx
Xxxxx
X. Xxxxxxxx
|
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