EXHIBIT 10.15
EMPLOYMENT AGREEMENT
This Agreement is made as of this 1st day of May, 2001, by and between
Primedex Health Systems, Inc., a New York corporation, having its principal
place of business at 0000 Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
hereinafter referred to as Employer, and Xxxxxx Xxxxx, 0000 Xxxxxxxxxxx Xxxx,
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000, hereinafter referred to as Employee.
Employee shall serve as Vice President and Chief Operations Officer of Employer.
PART 1.
TERMS OF EMPLOYMENT
Section 1.1. PERIOD OF EMPLOYMENT. Employer hereby employs Employee and
Employee hereby accepts employment with the Employer for a period of three (3)
years, commencing on the date hereinabove stated, and terminating three (3)
years thence. As used herein, the phrase "Employment Term" refers to the actual
period of employment of Employee by Employer hereunder, whether for the period
provided above, or whether terminated earlier as hereinafter provided, or
extended by mutual agreement by Employer and Employee. At the end of the initial
three-year term this Agreement shall automatically renew for successive one (1)
year terms unless either party delivers written notice of such Party's intention
not to renew at least ninety (90) days prior to the then applicable termination
date.
Section 1.2. EARLY TERMINATION FOR CAUSE.
(a) Either Party may immediately terminate this Agreement for
cause, which shall be any material breach of this Agreement which persists
thirty (30) days after the noticed Party is served notice, as described in
Section 6.2. Employer may immediately terminate this Agreement for cause, if
Employee willfully breaches or habitually neglects the duties Employee is
required to perform under the terms of this Agreement, or commits any acts of a
criminal nature, fraud, dishonesty, misrepresentation, or any acts of moral
turpitude. In any such case, Employer may terminate this Agreement by giving
written notice to Employee advising Employee of the specific acts or omissions
constituting the basis for such termination and such acts or omissions continue
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after Employee shall have had reasonable opportunity (which shall be defined as
15 days from the date Employee received said notice) to correct the specific
acts or omissions, which termination shall become effective if Employee has not
cured the complained of acts, or omissions, or if not capable of complete cure
within the 15 day period, then begun the cure and proceeds diligently to
completion. A termination shall be without prejudice to any other remedy to
which Employer or Employee may be entitled, either by Law, or in equity, or
under the terms of this Agreement.
(b) Notwithstanding any provision of this Agreement, if
Employer terminates this Agreement pursuant to Subsection 1.2(a), it shall pay
Employee on the effective date of such termination an amount equal to one year
of Employee's Base Salary at the then current rate.
Section 1.3. EARLY TERMINATION WITHOUT CAUSE.
(a) Either party may terminate this Agreement without cause at
any time upon ninety (90) days' prior written notice to the other. This ninety
(90) day period is hereinafter referred to as the "Notice Period." In the event
of such termination, the following provisions apply:
(i) Notwithstanding anything to the contrary
contained in this Agreement, in the event that Employer terminates this
Agreement without cause, Employee, if requested by Employer, shall continue to
perform his obligations and duties under this Agreement and assist with the
transition of duties to a new executive during the Notice Period. Employer, at
its option, may notify Employee at any time during the Notice Period that no
further services are to be performed.
(ii) In the event that Employee terminates this
Agreement or otherwise resigns his position with Employer without cause,
Employee shall be entitled only to Employee's Base Salary and bonus, if any,
accrued through the effective date of termination, plus any accrued but unused
vacation time. If requested by the Employer, Employee will perform his regular
duties during the Notice Period and assist in the transition of duties to a new
executive.
(b) In the event of termination of this Agreement pursuant to
Subsection 1.3(a), Employer shall pay to Employee on the effective date of such
termination an amount equal to the sum of (i) Employee's Base Salary to
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the date of termination; (ii) an amount equal to Employee's Base Salary for the
balance of the Term but no less than three (3) years, without regard to its
termination, (iii) an amount equal to the cost of benefits which Employee would
have received during the balance of the term of this Agreement without regard to
its termination and (iv) any accrued but unused vacation time.
(c) This Agreement shall terminate upon the death or total and
permanent disability of Employee. Employee shall be deemed to be totally and
permanently disabled in the event that he is unable to regularly and
consistently perform his normal duties as contemplated hereunder for a
continuous period of six (6) months. In the event that this Agreement terminates
due to Employee's death or total and permanent disability, Employer shall pay to
Employee upon such termination Employee's Base Salary accrued through the date
of Employee's death or the end of the six (6) month period during which he or
she becomes totally and permanently disabled, as the case may be.
Section 1.4. EFFECT OF MERGER, TRANSFER OF ASSETS, OR DISSOLUTION.
(a) This Agreement shall not be terminated by any voluntary or
involuntary dissolution of Employer resulting from either a merger or
consolidation in which Employer is not the consolidated or surviving
corporation, or a transfer of all or substantially all of the assets of
Employer.
(b) In the event of any such merger or consolidation or
transfer of assets, Employer's rights, benefits, and obligations hereunder shall
be assigned to the surviving or resulting corporation or the transferee of
Employer's assets.
PART 2.
DUTIES OF EMPLOYEE
Section 2.1. GENERAL DUTIES. Employee shall serve as Vice President,
Chief Operations Officer and a Director of Employer. Employee shall direct the
day-to-day operations of Employer, supervise Employer's personnel and implement
policies and plans appropriate to carry out the operational, financial and
business objectives of Employer, subject always to the policy set by Employer.
Specific responsibilities are outlined in Exhibit A, hereto. Employer shall
provide Employee with an office, facilities, equipment and personnel in
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keeping with the position to which he is employed and as necessary to assist in
the proper function of his job.
Section 2.2. MATTERS REQUIRING CONSENT OF EMPLOYER. Employee shall not,
without specific approval of Employer, do or contract any of the following:
(a) Borrow on behalf of Employer any amount in excess of
$100,000 unless previously approved by Employer;
(b) Permit any customer of Employer to become indebted to
Employer except in the normal course of business;
(c) Purchase capital equipment inconsistent with previously
approved operational programs;
(d) Sell any single capital asset of Employer except in the
normal course of business;
(e) Bind Employer to any contract or agreement, or financial
obligation which is inconsistent with the Employer's business plan;
(f) Commit Employer to any merger or acquisition, without
Board approval;
(g) Enter into any agreements, contracts or transactions
inconsistent with written Employer policies.
Section 2.3. DEVOTION OF TIME TO EMPLOYER'S BUSINESS. Employee shall
devote his productive time, ability, and attention to the business of Employer
during the term of this Agreement. Employee shall not directly or indirectly
render any services of a business, commercial, or professional nature to any
other person or organization for compensation without the prior written consent
of Employer.
PART 3.
COMPENSATION OF EMPLOYEE
Section 3.1. SALARY. As compensation for his services hereunder,
Employee shall receive a salary at the rate of Two Hundred Twenty-Five
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Thousand Dollars ($225,000) per annum, exclusive of the Employer benefits to
Employee described elsewhere in this Agreement, payable in equal installments
every other week on Employer's standard payment dates. Nothing contained herein
is intended to prohibit Employer from making salary increases based upon
business growth and/or executive performance by Employee as determined annually
by Employer.
Section 3.2. NONSTATUTORY STOCK OPTION. The Employer hereby grants
Employee an option to purchase three million (3,000,000) shares of common stock
of Employer at a purchase price of fifty-five cents ($0.55)per share. The number
of shares subject to this option shall be proportionately adjusted for any
change in the stock structure of Employer because of share dividends,
recapitalizations, reorganizations, mergers, or otherwise. The option is not
assignable and may only be exercised by Employee during the term of employment
under this agreement; provided, however, that in the event that the employment
term is terminated by Employer for reasons other than cause against Employee,
Employee shall retain the right to exercise any unused portion of the option
until May 1, 2006. The option may be exercised in whole or in part but may only
be exercised in lots of one hundred thousand (100,000) shares or more. Upon
exercise Employer will bonus to Employee $0.20 per share for each share
exercised by Employee up to an aggregate of Six Hundred Thousand Dollars
($600,000). Employee shall not have any of the rights of, nor be treated as, a
shareholder with respect to the shares subject to this option until he has
exercised that option and has become the shareholder of record of those shares.
PART 4.
EMPLOYEE BENEFITS
Section 4.1. USE OF AUTOMOBILE. Employer shall provide an automobile
allowance to Employee of no less than Eight Hundred Dollars ($800) per month or
such greater amount as is necessary to provide Employee with an executive
automobile, plus the cost of gas, oil, maintenance, and insurance expenses of
said automobile.
Section 4.2. MEDICAL COVERAGE. Employer agrees to provide Employee and
Employee's immediate family eligible dependents with a standard Medical benefit
package, as offered to other executives of Employer, throughout the term of this
Agreement.
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Section 4.3. DENTAL COVERAGE. Employer agrees to provide Employee and
Employee's immediate family eligible dependents with a standard Dental benefit
package, as offered to other executives of Employer, throughout the term of this
Agreement.
Section 4.4. LIFE INSURANCE. Employer agrees to obtain a life insurance
policy on the life of Employee in the face amount of at least Five Hundred
Thousand Dollars ($500,000), which amount is to be made payable to the
beneficiary or beneficiaries designated by Employee. Employer agrees to pay all
premiums on the policy during the term of employment provided herein. Upon
termination of this Agreement Employer agrees to transfer ownership of said
policy to Employee.
Section 4.5. VACATION. Employee shall be entitled to six (6) weeks of
fully compensated vacation time per annum. Vacation time shall cease to accrue
at such times as an amount equal to the aggregate of two (2) years of vacation
time shall have been earned and not have been used until such time as it shall
be used.
Section 4.6. HOLIDAY BENEFITS. Employee shall receive, throughout the
term of this Agreement, the standard holiday benefits, as pro rata accumulated,
as offered to other employees of Employer, which are a minimum of seven full
days and two one-half (1/2) days per annum.
Section 4.7. SICK LEAVE BENEFIT. Employer agrees to provide Employee
throughout the term of this Agreement with up to a maximum of twelve (12) days
in aggregate sick leave per annum, as pro rata accumulated, for bona fide
illness/injury, without loss of compensation. Sick leave benefit shall be
cumulative and credited unto future years, if not utilized concurrently.
Accumulated sick leave which has been earned and not taken will be paid at fifty
(50%) percent upon termination after two (2) years of full-time service.
Section 4.8. PROFESSIONAL FEES/JOURNALS/SOCIETY MEMBERSHIPS STIPEND.
Employer shall pay Employee One Thousand ($1,000) dollars per annum to help
reimburse Employee's miscellaneous costs in maintaining professional
relationships.
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Section 4.9. DIRECTORS AND OFFICERS INSURANCE. Employer shall provide
Employee with a standard directors and officers insurance policy, as provided by
Employer to other directors and/or officers.
Section 4.10. WORKER'S COMPENSATION COVERAGE BENEFIT. Employer shall
provide Employee with a Worker's Compensation insurance coverage
throughout the term of this Agreement.
Section 4.11. PERSONAL LEAVE BENEFIT. Employee shall be entitled to one
(1) personal day per annum as pro rata accumulated, off duty throughout the term
of this Agreement without the loss of compensation.
Section 4.12. PROFIT SHARING, Bonus and Retirement Plan Benefit.
Employee shall be entitled to participate on the same terms and conditions as
other employees in Employer's 401(k) qualified Profit-Sharing and Retirement
Plan and any other stock option or bonus programs.
Section 4.13. MEDICAL INSURANCE COVERAGE, IF DISABLED. Employer shall
continue to provide and pay for Employee's existing medical insurance coverage,
if Employee becomes disabled, up until age 65, or until Employee becomes
eligible for any alternate medical benefits program, if sooner.
Section 4.14. USE OF CELLULAR PHONE. Employer shall provide Employee
with a cellular phone and cover all associated fees.
PART 5.
BUSINESS EXPENSES
Section 5.1. BUSINESS EXPENSES. The services required by Employer will
require Employee to incur business expenses on behalf of Employer, and Employer
hereby agrees to reimburse Employee for all bona fide and reasonable expenses,
provided that such expenses are documented by invoice to Employer.
Section 5.2. OTHER BUSINESS EXPENSES. Employer will promptly reimburse
Employee for all other reasonable business expenses incurred by Employee in
connection with the business of Employer, including, but not limited to, travel,
society dues and state licenses required by the business.
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PART 6.
GENERAL PROVISIONS
Section 6.1. DISAGREEMENTS. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
Party shall be entitled to reasonable attorneys' fees, and court costs in
addition to any other relief to which it may be entitled.
Section 6.2. NOTICES. Any notices to be given herein by either Party to
the other may be effected by personal delivery in writing, or by mail,
registered, or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the Parties at the addresses appearing in the
introductory paragraph of this Agreement, but each Party may change its or his
address by written notice in accordance with this paragraph. Notices delivered
personally shall be deemed communicated as of three (3) days after mailing.
Section 6.3. ENTIRE AGREEMENT. This Agreement supersedes any and all
other agreements, either oral or in writing, between the Parties hereto, with
respect to the employment of Employee by Employer, and contains all of the
covenants and agreements between the parties with respect to such employment in
any manner whatsoever. Each Party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, originally, or otherwise,
have been made by either Party, or any one acting on behalf of any Party, which
are not embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement will be effec tive unless it is in writing, signed
by the Party to be charged therewith.
Section 6.4. PARTIAL INVALIDITY. If any provision in this Agreement is
held by a court of competent jurisdiction to be invalid, void, or unenforceable,
the remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
Section 6.5. CONFIDENTIALITY. In the course of performing services as
provided herein, Employee shall be engaged on behalf of Employer and use files,
records, agreements, documents, client lists, and other information of a
confidential nature, all of which are the property of and of great value to
Employer in connection with such business. Employee shall not give, sell, loan,
communicate, or otherwise disclose any of such information or materials, except
in the course of performing services as provided herein for the sole and
exclusive benefit of Employer. Upon termination of this Agreement, Employee
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shall return to Employer forthwith any and all of the Employer's records,
documents, and materials in Employee's possession or control, and Employee shall
not directly or indirectly use for Employee's benefit, or for the benefit of any
other person, firm or corporation, any of such confidential materials as shall
have come into Employee's possession, use, or attention, in the course of, or as
a result of, this association with Employer, as such relates to Employer's
business.
Section 6.6. NON-SOLICITATION AGREEMENT.
(a) Employee agrees for a period of one (1) year after
termination of this Agreement, not to solicit any hospital, clinic, healthcare
facility or other client having a contractual or business relationship with
Employer or any of its affiliates or subsidiaries, or any identified prospect or
identified potential client to which a marketing proposal or presentation was
made during the one (1) year period immediately preceding the termination of
this Agreement, involving the provision of imaging or radiation therapy
healthcare services. The agreement in the preceding sentence shall not relate to
solicitations (i) by the Employee with respect to a business or activity in
which the Employer or its affiliates are not involved or (ii) with respect to
any business arrangement which is to be conducted more than thirty (30) miles
from any location of Employer or its affiliates as of the effective date of
termination.
(b) During the one (1) year period after termination of employ
ment hereunder, Employee shall not, without the prior written consent of
Employer, which consent shall not be unreasonably withheld, become employed by
or make, directly or indirectly, any proposal to acquire, alone or with others,
any business or entity, as to which substantive discussions involving a
potential acquisition, joint venture or other similar or comparable business
arrangement have been conducted by Employee or on behalf of Employer, or any of
its affiliates or subsidiaries during the one (1) year period immediately
preceding the termination of this Agreement.
(c) Employee further agrees to refrain from any activity of
any nature intended or reasonably calculated to result in the termination or
cancellation of any contractual or business arrangement between Employer or any
of its affiliates or subsidiaries and any insurer, client, facility or other
business or entity during the one (1) year period after termination of
employment hereunder.
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(d) Nothing in this Agreement shall prevent Employee from
making passive investments in third parties so long as such investments do not
require Employee to perform any services in connection with any such investments
in such third parties.
(e) Employee shall not during a one (1) year period after the
termination of this Agreement, solicit or seek to influence, either directly or
indirectly, any employee or any healthcare provider under contract with Employer
or any of its affiliates or subsidiaries, to enter into any employment
agreement, independent contractor arrangement, or any other contractual
arrangement whereby such individual would perform services for compensation,
either directly or indirectly, for any person, firm, corporation or other entity
or business that provides products or services in competition with Employer or
any of its affiliates or subsidiaries.
Section 6.7. BREACH AND REMEDIES.
(a) Employee acknowledges that the breach or threatened breach
of any of the covenants set forth in Sections 6.5 and 6.6 may result in
immediate and irreparable injury to Employer. Accordingly, Employee agrees that
in addition to any rights or remedies available to Employer for a breach by
Employee of said sections, Employer shall be entitled to injunctive relief to
enforce the obligations of Employee contained in such Sections. Nothing herein
shall be construed as prohibiting Employer from pursuing any other legal or
equitable remedies that may be available to it for any such breach or threatened
breach, including the recovery of damages from Employee.
(b) The periods of time provided for in Sections 6.5 and 6.6
shall be extended by any period of violation or periods of time required to
resolve by arbitration, not to exceed 45 days, any dispute regarding the
provisions thereof.
(c) Employee hereby acknowledges that the covenants set forth
in Sections 6.5 and 6.6 are reasonable in all respects and are necessary to
protect the legitimate business interests of Employer. In the event that any of
the provisions of this Agreement are found to be unenforceable or void (either
in whole or in part), then the offending portion shall be construed as valid and
enforceable only to the extent permitted by law and the balance of this
Agreement will remain in full force and effect. It is the intention of the
parties to restrict the activities of Employee only to the extent necessary to
protect the
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legitimate business interests of Employer, its subsidiaries and/or affiliates,
and not to deprive Employee of the right to earn a livelihood.
Section 6.8. WAIVER. No waiver by any Party to this Agreement of any
provision hereof, shall be deemed to be a waiver of any other provision hereof,
or any subsequent breach of the same, or any other provision by any other Party
or Parties hereto.
Section 6.9. AMENDMENTS. This Agreement may not be modified or
amended, except in writing executed by the Parties hereto.
Section 6.10. BINDING EFFECT. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the Parties, their
respective representatives, successors in interest and assigns.
Section 6.11. LAW GOVERNING AGREEMENT. This Agreement shall be
governed by and construed in accordance with the laws of the State of
California.
EMPLOYER:
PRIMEDEX HEALTH SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx, M.D. Date:
-------------------------------------------- ------------------------------
Xxxxxx X. Xxxxxx, M.D., President
EMPLOYEE:
/s/ Xxxxxx Xxxxx Date:
----------------------------------------------- ------------------------------
Xxxxxx Xxxxx
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EXHIBIT A
TO
EMPLOYMENT AGREEMENT OF XXXXXX XXXXX
Specific Responsibilities
-------------------------
He shall guide the operations of Primedex Health Systems, Inc., and its
subsidiaries ("PHS"). As Chief Operations Officer of PHS, he is responsible for
directing the business with the objective of providing maximum profit and return
on invested capital; establishing current and long-range objectives, plans and
policies subject to the approval of the Board of Directors; and representing PHS
with its major customers and the public.
Develops the basic objectives, and operating plans of PHS; submits these to the
Board for its approval.
Insures that PHS policies are uniformly understood and properly interpreted and
administered by subordinates; reviews and approves proposed internal policies of
subordinate units.
Insures that adequate plans for future development and growth of PHS are
prepared, and participates in their preparation; periodically presents such
plans for general review and approval by the Board.
Analyzes operating results of PHS and its principal components relative to
established objectives and insures that appropriate steps are taken to correct
unsatisfactory conditions.
Reviews projections of the PHS working capital requirements.
Establishes and maintains an effective system of communications throughout PHS.
Prescribes the specific limitations of the authority of subordinates regarding
policies, contractual commitments, expenditures, and personnel actions.
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Reviews and approves the appointment, employment, transfer or termination of key
executives. Insures the adequacy and proper utilization of the services provided
by the corporate staff units and resolves any conflicts arising between
operating groups, staff units and other elements under immediate supervision.
Plans for the development of human resources within PHS and maintains programs
which will encourage successful future management of PHS.
Takes necessary actions to protect and enhance PHS's investments in subsidiaries
and affiliates within PHS.
Represents PHS, as appropriate, in its relationships with major customers,
suppliers, competitors, professional societies and similar groups.
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