EXHIBIT 10.11
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Agreement is to be effective as of March 2, 2004, by and between
OrthoLogic Corp., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxx
("Employee"), and supersedes in its entirety the Amended and Restated Employment
Agreement, dated November 1, 2003, between the Company and Employee.
RECITALS:
A. The parties wish to set forth in this Agreement the terms and
conditions of employment.
AGREEMENT:
In consideration of the mutual covenants and agreements set forth
herein, the parties agree as follows:
1. EMPLOYMENT AND DUTIES.
(a) DEFINITION OF "ELECTION." Within the limitations described
in Sections 7 and 8 of this Agreement, either party may give the other notice
that she or it has elected to begin a one-year transition leading to the
termination of Employee's employment by the Company. Such a notice is referred
to in this Agreement as an "Election." The "Election Effective Date" shall be
the date of the Election, in the case of an Election by the Company pursuant to
Section 7 hereof, or 30 days after the date of the Election, in the case of an
Election by Employee pursuant to Section 8 hereof.
(b) DUTIES BEFORE AN ELECTION. Subject to the terms and
conditions of this Agreement, prior to the Election Effective Date, the Company
employs Employee to serve in the capacity of Senior Vice President / Chief
Financial Officer and Employee accepts such employment and agrees to perform
such reasonable responsibilities and duties as may be assigned to her from time
to time by the Company's Chief Executive Officer ("CEO"). Employee's title shall
be Senior Vice President / Chief Financial Officer with general responsibility
for all administrative functions. Such title and duties may be changed from time
to time by the CEO. Employee will report directly to the CEO.
(c) DUTIES AFTER AN ELECTION. Effective upon the Election
Effective Date, Employee will report to the CEO. Employee shall not have an
official title or any set work hours. While various projects assigned to
Employee may require more or less time within any given month, it is
contemplated that, without her consent, Employee will not be asked to work on
Company matters for more than 6 days (or the equivalent thereof) per quarter. It
is understood that Employee may have limited availability during normal business
hours. Employee agrees to use her reasonable best efforts to be available during
normal business hours when necessary to accomplish a specific assigned project.
Employee understands that from and after the Election Effective Date, and until
the end of the term of this Agreement, the Company will not provide her with an
office, but will provide reasonable secretarial and other staff support and will
provide
ancillary office equipment such as dictating equipment and a desk-top computer
that Employee may continue to use until the end of the term at another location
selected by her. After the Election Effective Date, Employee shall not be
entitled to use any Company owned or supported laptop computers or cell phones
except to the extent required by specific projects assigned to Employee.
2. TERM. Before an Election, Employee's employment shall have an
indefinite term and shall continue until terminated as provided in this
Agreement. Upon an Election, the term of Employee's employment by the Company
shall convert automatically to a term beginning on the Election Date and ending
on the one year anniversary of the Election Date (the "Election Term"). After
the Election, any extension or renewal of such term shall require the written
consent of both parties.
3. COMPENSATION.
(a) SALARY. (i) Before the Election Effective Date, the
Company shall pay Employee a minimum base annual salary, before deducting all
applicable withholdings, of $200,000 per year, payable at the times and in the
manner dictated by the Company's standard payroll policies; (ii) during the
Election Term, Employee's base annual salary shall be $200,000.
(b) BONUS. (i) Before the Election Effective Date, Employee
shall be eligible to participate in such bonus and incentive programs as
determined from time to time by the Board. Any bonuses shall be based upon the
achievement of individual goals and Company performance. Employee's bonus, if
any, will be calculated using $200,000 as Employee's annual base salary, pro
rated as necessary to reflect the number of months worked by Employee prior to
the Election Effective Date; (ii) Employee shall not be entitled to accrue any
additional bonus amount after the Election Effective Date, but any bonuses fully
earned prior to the Election Effective Date shall remain due in accordance with
their terms.
(c) STOCK OPTIONS. From time to time, as determined by the
Compensation Committee of the Company's Board of Directors in its discretion,
the Company shall grant to Employee options to purchase shares of the Company's
common stock, with an exercise price equal to the fair market value of the stock
on the effective date of the grant. On the date of this Agreement, the Company,
acting through the Compensation Committee, shall grant an option to purchase
25,000 shares of Company common stock pursuant to the Company's 1997 Stock
Option Plan.
4. FRINGE BENEFITS. Both before and after the Election Effective Date,
in addition to the compensation, bonus and options described in Section 3, and
any other employee benefit plans (including without limitation pension, savings
and disability plans) generally available to employees, the Company shall
include Employee in any group health insurance plan and, if eligible, any group
retirement plan instituted by the Company. The manner of implementation of such
benefits with respect to such items as procedures and amounts are discretionary
with the Company. Upon Employee's acceptance of employment with another employer
in connection with which Employee works, or is expected to work, 1,000 hours or
more per year, Employee shall no longer be entitled to participate in any
health, dental, retirement or other employee
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benefit plans of the Company. During the term of Employee's employment under
this Agreement, Employee shall be considered as an employee for the purposes of
any Company stock option plans.
5. VACATION. Employee shall be entitled to vacation with pay in
accordance with the Company's vacation policy as in effect from time to time. In
addition, Employee shall be entitled to such holidays as the Company may approve
from time to time.
6. TERMINATION.
(a) FOR CAUSE. The Company may terminate this Agreement for
cause upon written notice to Employee stating the facts constituting such cause,
provided that Employee shall have 30 days following such notice to cure any
conduct or act, if curable, alleged to provide grounds for termination for cause
hereunder. In the event of termination for cause, the Company shall be obligated
to pay Employee only the minimum base salary due her through the date of
termination. The written notice shall state the cause for termination. Cause
shall include neglect of duties, willful failure to abide by instructions or
policies from or set by the Board of Directors, commission of a felony or
serious misdemeanor offense or pleading guilty or nolo contendere to same,
Employee's breach of this Agreement or Employee's breach of any other material
obligation to the Company.
(b) WITHOUT CAUSE. The Company may terminate Employee's
Employment at any time, immediately and without cause, by giving written notice
to Employee. If the Company terminates Employee without cause, provided Employee
first executes a Severance Agreement in the form then used by the Company, the
Company shall continue to pay to Employee her minimum base salary in effect at
the time of termination for a period of one year following the date of
termination or, if an Election has been made, until the expiration of the
Election Term, at the time and in the manner dictated by the Company's standard
payroll policies.
(c) DISABILITY. If during the term of this Agreement, Employee
fails to perform her duties hereunder on account of illness or other incapacity
for a period of 45 consecutive days, or for 60 days during any six-month period,
the Company shall have the right to terminate this Agreement without further
obligation hereunder except as otherwise provided in disability plans generally
applicable to employees.
(d) DEATH. If Employee dies during the term of this Agreement,
this Agreement shall terminate immediately, and Employee's legal representatives
shall be entitled to receive the base salary due Employee through the last day
of the calendar month in which her death shall have occurred and any other death
benefits generally applicable to executive employees.
(e) RESIGNATION. Employee may resign her employment by giving
the Company written notice. In the event of such a resignation, the Company
shall be obligated to pay Employee only the minimum base salary due her through
the effective date of the resignation.
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7. ELECTION BY THE COMPANY. The Company may make an Election at any
time with or without cause.
8. ELECTION BY EMPLOYEE. Employee may make an Election at any time with
or without cause.
9. CONFIDENTIAL INFORMATION. Employee acknowledges that Employee may
receive, or contribute to the production of, Confidential Information. For
purposes of this Agreement, Employee agrees that "Confidential Information"
shall mean any and all information or material proprietary to the Company or
designated as Confidential Information by the Company and not generally known by
non-the Company personnel, which Employee develops or of or to which Employee
may obtain knowledge or access through or as a result of Employee's relationship
with the Company (including information conceived, originated, discovered or
developed in whole or in part by Employee). Confidential Information includes,
but is not limited to, the following types of information and other information
of a similar nature (whether or not reduced to writing) related to the Company's
business: discoveries, inventions, ideas, concepts, research, development,
processes, procedures, "know-how", formulae, marketing or manufacturing
techniques and materials, marketing and development plans, business plans,
customer names and other information related to customers, price lists, pricing
policies, methods of operation, financial information, employee compensation,
and computer programs and systems. Confidential Information also includes any
information described above which the Company obtains from another party and
which the Company treats as proprietary or designates as Confidential
Information, whether or not owned by or developed by the Company, including
Confidential Information acquired by the Company from any of its affiliates.
Employee acknowledges that the Confidential Information derives independent
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use. Information publicly known without
breach of this Agreement that is generally employed by the trade at or after the
time Employee first learns of such information, or generic information or
knowledge which Employee would have learned in the course of similar employment
or work elsewhere in the trade, shall not be deemed part of the Confidential
Information. Employee further agrees:
a. To furnish the Company on demand, at any time during or
after employment, a complete list of the names and addresses of all present,
former and potential suppliers, financing sources, clients, customers and other
contacts gained while an employee of the Company in Employee's possession,
whether or not in the possession or within the knowledge of the Company.
b. That all notes, memoranda, electronic storage,
documentation and records in any way incorporating or reflecting any
Confidential Information shall belong exclusively to the Company, and Employee
agrees to turn over all copies of such materials in Employee's control to the
Company upon request or upon termination of Employee's employment with the
Company.
c. That while employed by the Company and thereafter Employee
will hold in confidence and not directly or indirectly reveal, report, publish,
disclose or transfer any of the
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Confidential Information to any person or entity, or utilize any of the
Confidential Information for any purpose, except in the course of Employee's
work for the Company.
d. That any idea in whole or in part conceived of or made by
Employee during the term of his employment, consulting, or similar relationship
with the Company which relates directly or indirectly to the Company's current
or planned lines of business and is made through the use of any of the
Confidential Information of the Company or any of the Company's equipment,
facilities, trade secrets or time, or which results from any work performed by
Employee for the Company, shall belong exclusively to the Company and shall be
deemed a part of the Confidential Information for purposes of this Agreement.
Employee hereby assigns and agrees to assign to the Company all rights in and to
such Confidential Information whether for purposes of obtaining patent or
copyright protection or otherwise. Employee shall acknowledge and deliver to the
Company, without charge to the Company (but at its expense) such written
instruments and do such other acts, including giving testimony in support of
Employee's authorship or inventorship, as the case may be, necessary in the
opinion of the Company to obtain patents or copyrights or to otherwise protect
or vest in the Company the entire right and title in and to the Confidential
Information.
10. LOYALTY DURING EMPLOYMENT TERM. Employee agrees that during the
term of Employee's employment by the Company, Employee will devote substantially
all of Employee's business time and effort to and give undivided loyalty to the
Company, and will not engage in any way whatsoever, directly or indirectly, in
any business that is competitive with the Company or its affiliates, nor
solicit, or in any other manner work for or assist any business which is
competitive with the Company or its affiliates. During the term of Employee's
employment by the Company, Employee will undertake no planning for or
organization of any business activity competitive with the Company or its
affiliates, and Employee will not combine or conspire with any other employee of
the Company or any other person for the purpose of organizing any such
competitive business activity.
11. NON-COMPETITION; NON-SOLICITATION. The parties acknowledge that
Employee will acquire much knowledge and information concerning the business of
the Company and its affiliates as the result of Employee's employment. The
parties further acknowledge that the scope of business in which the Company is
engaged as of the date of execution of this Agreement is world-wide and very
competitive and one in which few companies can successfully compete. Certain
activities by Employee after this Agreement is terminated would severely injure
the Company. Accordingly, until one year after this Agreement is terminated or
Employee leaves the employment of the Company for any reason, Employee will not:
a. Engage in any work activity for or in conjunction with any
business or entity that is in competition with or is preparing to compete with
the Company;
b. Persuade or attempt to persuade any potential customer or
client to which the Company or any of its affiliates has made a proposal or
sale, or with which the Company or any of its affiliates has been having
discussions, not to transact business with the Company or such affiliate, or
instead to transact business with another person or organization;
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c. Solicit the business of any customers, financing sources,
clients, suppliers, or business patrons of the Company or any of its
predecessors or affiliates which were customers, financing sources, clients,
suppliers, or business patrons of the Company at any time during Employee's
employment by the Company, or within three years prior to the Effective Date of
Employee's employment, provided, however, that if Employee becomes employed by
or represents a business that exclusively sells products that do not compete
with products then marketed or intended to be marketed by the Company, such
contact shall be permissible; or
d. Solicit, endeavor to entice away from the Company or any of
its affiliates, or otherwise interfere with the relationship of the Company or
any of its affiliates with, any person who is employed by or otherwise engaged
to perform services for the Company or any of its affiliates, whether for
Employee's account or for the account of any other person or organization.
12. INJUNCTIVE RELIEF. It is agreed that the restrictions contained in
Sections 9, 10 and 11 of this Agreement are reasonable, but it is recognized
that damages in the event of the breach of any of those restrictions will be
difficult or impossible to ascertain; and, therefore, Employee agrees that, in
addition to and without limiting any other right or remedy the Company may have,
the Company shall have the right to an injunction against Employee issued by a
court of competent jurisdiction enjoining any such breach without showing or
proving any actual damage to the Company. This paragraph shall survive the
termination of Employee's employment.
13. PART OF CONSIDERATION. Employee also agrees, acknowledges,
covenants, represents and warrants that he is fully and completely aware that,
and further understands that, the restrictive covenants contained in Sections 9,
10, and 11 of this Agreement are an essential part of the consideration for the
Company entering into this Agreement and that the Company is entering into this
Agreement in full reliance on these acknowledgments, covenants, representations
and warranties.
14. TIME AND TERRITORY REDUCTION. If any of the periods of time and/or
territories described in Sections 9, 10 and 11 of this Agreement are held to be
in any respect an unreasonable restriction, it is agreed that the court so
holding may reduce the territory to which the restriction pertains or the period
of time in which it operates or may reduce both such territory and such period,
to the minimum extent necessary to render such provision enforceable.
15. SURVIVAL. The obligations described in Sections 9 and 11 of this
Agreement shall survive any termination of this Agreement or any termination of
the employment relationship created hereunder.
16. NONDELEGABILITY OF EMPLOYEE'S RIGHTS AND COMPANY ASSIGNMENT RIGHTS.
The obligations, rights and benefits of Employee hereunder are personal and may
not be delegated, assigned or transferred in any manner whatsoever, nor are such
obligations, rights or benefits subject to involuntary alienation, assignment or
transfer. Upon mutual agreement of the parties, the Company upon reasonable
notice to Employee may transfer Employee to an affiliate of the Company, which
affiliate shall assume the obligations of
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the Company under this Agreement. This Agreement shall be assigned automatically
to any entity merging with or acquiring the Company.
17. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Arizona,
exclusive of the conflict of law provisions thereof, and the parties agree that
any litigation pertaining to this Agreement shall be in courts located in
Maricopa County, Arizona.
18. ATTORNEYS' FEES. If any party finds it necessary to employ legal
counsel or to bring an action at law or other proceeding against the other party
to enforce any of the terms hereof, the party prevailing in any such action or
other proceeding shall be paid by the other party its reasonable attorneys' fees
as well as court costs all as determined by the court and not a jury.
19. NOTICES. All notices, demands, instructions, or requests relating
to this Agreement shall be in writing and, except as otherwise provided herein,
shall be deemed to have been given for all purposes (i) upon personal delivery,
(ii) one day after being sent, when sent by professional overnight courier
service from and to locations within the Continental United States, (iii) five
days after posting when sent by United States registered or certified mail, with
return receipt requested and postage paid, or (iv) on the date of transmission
when sent by facsimile with a hard-copy confirmation; if directed to the person
or entity to which notice is to be given at his or its address set forth in this
Agreement or at any other address such person or entity has designated by
notice.
To the Company: ORTHOLOGIC CORP.
0000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Chief Executive Officer
To Employee: Xxxxxx X. Xxxxxxx
0000 X. Xxxxxxxxxx Xx.
Xxxxx, XX 00000
20. ENTIRE AGREEMENT. This Agreement, the Invention, Confidential
Information and Non-Competition Agreement dated February 3, 1999, and documents
regarding the grant of stock options constitute the final written expression of
all of the agreements between the parties and are a complete and exclusive
statement of those terms. They supersede all understandings and negotiations
concerning the matters specified herein. Any representations, promises,
warranties or statements made by either party that differ in any way from the
terms of this written Agreement shall be given no force or effect. The parties
specifically represent, each to the other, that there are no additional or
supplemental agreements between them related in any way to the matters herein
contained unless specifically included or referred to herein. No addition to or
modification of any provision of this Agreement shall be binding upon any party
unless made in writing and signed by all parties. To the extent that there is
any conflict between this Agreement and the Invention, Confidential Information
and Non-Competition Agreement, the provisions of this Agreement shall govern.
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21. WAIVER. The waiver by either party of the breach of any covenant or
provision in this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party.
22. INVALIDITY OF ANY PROVISION. The provisions of this Agreement are
severable, it being the intention of the parties hereto that should any
provisions hereof be invalid or unenforceable, such invalidity or
unenforceability of any provision shall not affect the remaining provisions
hereof, but the same shall remain in full force and effect as if such invalid or
unenforceable provisions were omitted.
23. ATTACHMENTS. All attachments or exhibits to this Agreement are
incorporated herein by this reference as though fully set forth herein. In the
event of any conflict, contradiction or ambiguity between the terms and
conditions in this Agreement and any of its attachments, the terms of this
Agreement shall prevail.
24. INTERPRETATION OF AGREEMENT. When a reference is made in this
Agreement to an article or section, such reference shall be to an article or
section of this Agreement unless otherwise indicated. The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation."
25. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement.
26. BINDING EFFECT; BENEFITS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
successors, executors, administrators and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
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This Agreement has been executed by the parties as the date first
written above.
ORTHOLOGIC CORP.
("Company")
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President/Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxx
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