Exhibit 10.23
OPHTHALMIC IMAGING SYSTEMS
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of this 14 day
of July 1997, by and between OPHTHALMIC IMAGING SYSTEMS, a California
corporation ("Employer") and XXXXXXX X. XXXXX ("Employee").
NOW, THEREFORE, in consideration of the mutual promises set forth
below, the parties to this Agreement mutually agree as follows:
AGREEMENTS
1. EMPLOYEE'S DUTIES AND AUTHORITY. Employer hereby employs
Employee, and Employee hereby accepts employment with Employer, as
President/Chief Operating Officer of Employer. Employee's duties shall be
as provided in Employer's bylaws and/or as specified by Employer's board of
directors from time to time.
2. LIMITATIONS ON OUTSIDE ACTIVITIES. During the term of this
Agreement, Employee shall devote his best efforts, full energies, abilities
and productive time to the performance of his duties under this Agreement
and shall not, without Employer's prior written consent, render to others
services of any kind for compensation, or engage in any other business
activities that would materially interfere with the performance of his
duties under this Agreement.
3. COMPETITION, SOLICITATION.
A. During the term of this Agreement, Employee shall not,
directly or indirectly, whether as a partner, employee,
creditor, shareholder or otherwise, promote, participate or
engage in any activity or other business competitive with
Employer's business.
B. Because of his employment by Employer, Employee will have
access to trade secrets, customer lists and customers and
its methods of doing business. Employee agrees not to use
or disclose, directly or indirectly, to any person,
organization or entity:
(1) any confidential information or knowledge concerning
the business and affairs of the company or
(2) any inventions, discoveries, improvements, products,
processes, technology, trade secrets, customer lists or
any other confidential materials whether acquired
before or after the effective date of this Agreement is
disclosure or use would adversely affect the business
of the company or accord to a competitor of Employer a
material commercial advantage. This paragraph does not
restrict Employee from disseminating or
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using any information which is published or available
to the general public, except where such publication or
availability results from Employee's acts.
C. Employee agrees that for a period of three (3) years after
expiration or earlier termination of this Agreement, he will
not, directly or indirectly, solicit any of the customers of
Employer's to transact business with any other firm or
enterprise which is engaged in competition with Employer.
4. TERM OF AGREEMENT. Subject to earlier termination as provided in
this Agreement, the term of this Agreement shall be two (2) years from the
date of this Agreement.
5. COMPENSATION. Employer makes no representations and provides no
advice concerning the treatment by taxing authorities of any Employee
compensation set forth in this Agreement. Employer strongly urges Employee
to consult with his own independent tax advisers. Employer shall
compensate Employee according to the terms of this Agreement as follows:
A. In consideration for the services to be rendered by Employee
under this Agreement, the Employer agrees to pay, and
Employee agrees to accept as compensation, an annual salary
of ONE HUNDRED FORTY THOUSAND DOLLARS ($140,000) per year,
payable in accordance with the Company's standard payroll
policies.
B. Employee shall be eligible for an annual bonus in an amount
not to exceed FORTY TWO THOUSAND DOLLARS ($42,000), which
amount is equal to 30% of Employee's annual salary. The
criteria and/or formulae by which the actual bonus amount is
calculated will be determined pursuant to a separate
agreement. With respect to 50% of the actual bonus amount
Employee agrees to accept as payment thereof, and Employer
agrees to issue as payment, unregistered shares of the
Company's Common Stock, which includes customary transfer
restrictions, the fair market value ("FMV") of which at the
date of issuance, is equal to 50% of the actual bonus
payment. FMV of each share so issued shall be the closing
price on the applicable national securities exchange on the
date of issuance.
C. Employer agrees to grant, and Employee agrees to accept, a
stock option to purchase 100,000 shares of the Company's
Common Stock at the closing market price of the stock on the
date duly granted by the Company's Board of Directors, which
date will not be before the date of this Agreement, nor
later than the minimum period practicable after the date of
this Agreement and in any event no later than the day before
any public announcement of Employee's hiring. The option
shall vest and become exercisable with respect to TWENTY
FIVE THOUSAND (25,000) of the shares at the completion of
Employee's sixth month of employment and with respect to TWO
THOUSAND FIVE HUNDRED (2,500) of the shares at the
completion of each of the subsequent 30 months thereafter
for a total vesting period of 36 months, subject to the
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terms and conditions of the Stock Option Agreement pursuant
to which stock option is granted.
D. In consideration for relocation expenses to be incurred by
the Employee, including, but not limited to temporary
housing, meals, moving and other related expenses, Employer
agrees to pay, and Employee agrees to accept as a relocation
allowance, up to THIRTY THOUSAND DOLLARS ($30,000), with
such allowance to be used at the sole discretion of the
Employee.
E. Employee shall be entitled to up to five (5) days of
professional development during the first year of employment
for which time the Employer agrees to pay the Employee's
salary. Employee shall be entitled to be reimbursed for
expenses incurred in connection with such development,
including, but not limited to, expenses of travel and
entertainment, meals, lodgings and other expenses of a
business nature, upon presentation of appropriate vouchers.
F. Employee shall be reimbursed for ordinary and necessary
business expenses incurred in connection with his
employment, including, but not limited to, expenses of
travel and entertainment, meals, lodgings and other expenses
of a business nature, upon presentation of appropriate
vouchers.
G. Employee shall be entitled to such fringe benefits,
including life, disability, accident, health, wage
continuation and other insurance and contributions to
retirement plans, employee benefits plans, savings or
profit-sharing plans, deferred compensation plans,
supplemental retirement or excess-benefit plans stock
option, incentive or other bonus plans, paid vacations and
other similar plans or programs, if any, subject in each
case to the generally applicable terms and conditions of the
plan or program in question and to the determination of any
committee administering such plan or program.
H. Salary increases, if any, will be made only at the sole
discretion of Employer during the term of this Agreement.
I. Employee shall receive full compensation and benefits for
any period of illness or incapacity during the term of this
Agreement, provided, however, Employer shall have the right
to terminate this agreement if such illness or incapacity
shall be of such a character as to totally disable Employee
from rendering any services to Employer for a period of more
than sixty (60) days, by giving at least twenty-one (21)
days' written notice of its intention to do so. If Employee
shall resume his duties within the twenty-one (21) day
period following receipt of such notice, and shall perform
such duties on a regular basis for sixty (60) days
thereafter, this Agreement and Employee's employment
hereunder shall continue in full force and effect, and
Employer's notice of intention to terminate shall have no
further force or validity.
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J. Employee shall be entitled to severance pay if Employer
terminates Employee's employment under this Agreement,
except as set forth in Section 7, below, or if Employee
resigns because of Employer's breach of this Agreement or
because of a reduction in scope of Employee's
responsibilities or corresponding change in title.
Employer agrees to pay, and Employee agrees to accept, as full
and complete severance, if applicable, an amount equal to the
greater of: (i) SEVENTY THOUSAND DOLLARS ($70,000); or (ii) one
twelfth of Employee's annual salary for each month of employment,
not to exceed ONE HUNDRED FORTY THOUSAND DOLLARS ($140,000). The
severance pay is deemed to be a reasonable estimate of Employee
damages, the exact amount of which cannot be ascertained.
6. INDEMNIFICATION BY EMPLOYER. Employer shall, to the maximum
extent permitted by law, indemnify and hold Employee harmless against
expenses, including reasonable attorney's fees, judgments, fines,
settlements and other amounts actually and reasonably incurred in
connection with any proceeding arising by reason of Employee's employment
by Employer. Employer shall advance to Employee any expenses incurred in
defending any such proceeding to the maximum extent permitted by law.
7. TERMINATION. Employer shall be entitled at its option to
terminate Employee's employment under this Agreement at any time, for the
following reasons:
A. Because of Employee's fraud, misappropriation, embezzlement
or theft;
B. Because of Employee's conviction of a felony;
C. Because Employee has engaged in competitive activities in
breach of his covenants under Section 3 above;
D. Because Employee has abandoned his duties; or
E. As provided in Section 5I, above.
F. Without cause, and for any reason, provided that in such
event Employer shall pay to Employee, and Employee shall
accept, severance pay as provided in Section 5J, above.
Such a termination of Employee's employment shall not constitute
a breach of this Agreement by Employer. Upon a termination under
subsection 7A, 7B, 7C or 7D, Employer shall be obligated to pay only
compensation which has accrued due to actions to Employee before such
termination. Employee shall not be entitled to severance pay or continuing
benefits of any kind upon such termination, other than such benefits
mandated by law.
8. PROPRIETARY INFORMATION AND INVENTIONS. All processes,
inventions, patents, copyrights, trademarks and other intangible rights
that may be conceived or developed by Employee, either alone or with
others, during the term of Employee's employment, whether or not conceived
or developed during Employee's working hours, and with respect to which the
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equipment, supplies, facilities or trade secret information of Employer was
used, or that relate to the ocular health care business of Employer, or
that result from any work performed by Employee for Employer, shall be the
sole property of Employer. Employee shall disclose to Employer all
inventions conceived during the term of employment, whether or not the
property of Employer under the terms of preceding sentence provided that
such disclosure shall be received by Employer in confidence. Employee
shall execute all documents, including patent applications and assignments,
required by Employer to establish Employer's rights under this section.
This section does not apply to any invention that qualifies fully under the
provisions of section 2870 of the California Labor Code, a copy of which
attached hereto as Exhibit A.
9. VACATION. Employee shall be entitled to vacation benefits as
made available by the Company in accordance with standard Company vacation
policy, except that Employee shall be entitled to 15 vacation days per year
during the term of this Agreement, during which time his compensation shall
be paid in full.
10. DEATH DURING EMPLOYMENT. If Employee dies during the term of
this Agreement, this Agreement shall terminate immediately, and Employer
shall pay to the estate of Employee the basic annual salary and expense
requirement which would otherwise be payable to Employee through the last
day of the calendar year in which his death shall have occurred, provided
that the salary payment shall not, in any event, represent less than one
(1) month salary.
11. MISCELLANEOUS.
A. NO CONFLICT. Employee hereby warrants that he is not now
under any legal or contractual obligation that would
conflict in any manner whatsoever with the obligations and
duties by him herein undertaken, and that the execution of
this Agreement will not breach any agreement to which
Employee is presently a party.
B. CONSTRUCTION. This Agreement shall be governed by, and
shall be construed in accordance with, the laws of the State
of California and shall be binding upon, and shall inure to
the benefit of the heirs, executors, assigns, transferees
and successors in interest of the parties hereto,
notwithstanding the reorganization, merger, consolidation or
change in personnel or Employer.
C. NOTICES. Any notice to Employer required or permitted under
this Agreement shall be given in writing to Employer, either
by personal service or by registered or certified mail,
postage prepaid, addressed to Employer at its then principal
place of business. Any such notice to Employee shall be
given in a like manner, and if mailed, shall be addressed to
Employee at his home address then shown in Employer's files.
For the purpose of determining compliance with any time
limit in this Agreement, a notice shall be deemed to have
been duly given (a) on the date of service, if personally
served on the party to whom notice is to be given, or (b) on
the second business day after mailing, if mailed to the
party to whom the notice is to be given in the manner
provided in his section.
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D. WAIVER OF BREACH. The waiver of either party of a breach of
any provision of this Agreement shall not operate or be
construed as a waiver of any provision or of any subsequent
breach of the same provision or of any subsequent breach of
the same provision thereof.
E. ENTIRE AGREEMENT. This instrument contains the entire
agreement of the parties and supersedes all prior and
contemporaneous, oral or written, agreements, understandings
and the like between the parties. It may not be changed
orally, but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
F. SEVERABILITY. If any portion of this Agreement is held by a
court of competent jurisdiction to conflict with any
federal, state or local law, such portion or portions of
this Agreement are hereby declared to be of no force or
effect in such jurisdiction, and this Agreement shall
otherwise remain in full force and effect and be construed
as if such portion had not been included herein.
G. SECTION HEADINGS. The section headings used herein are
provided for informational purposes only and shall effect
neither the meaning of the terms nor the intent of the
parties.
H. ATTORNEYS' FEES. If any action is commenced to enforce or
interpret the terms of this Agreement, the prevailing party
is such action shall be entitled to recover his or its
attorneys' fees and other costs incurred.
I. ASSIGNABILITY; SUCCESSORS AND MERGERS. Neither party
hereunder shall have the right to assign this Agreement or
any rights or obligations hereunder without the consent of
the other party; provided, however, that upon the sale of
all or substantially all the assets, business and goodwill
of Employer to another corporation, or upon the merger or
consolidation of Employer with another corporation or
corporations, this Agreement shall inure to the benefit of
and be binding upon, both Employee and the corporation
purchasing such assets, business or goodwill or surviving
such merger or resulting from such consolidation, as the
case may be, in the same manner and to the same extent as
though such other corporation were Employer.
J. REMEDIES. If any of the covenants or agreements contained
in paragraphs 3 or 8 here of are violated, Employee agrees
and acknowledges that such violation or threatened violation
will cause irreparable injury to Employer and that the
remedy at law for such violation or threatened violation
will be inadequate and that Employer will be entitled to
injunctive relief without the necessity of proving actual
damages.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first written above.
EMPLOYER:
OPHTHALMIC IMAGING SYSTEMS,
a California corporation
By: XXXXXX X. XXXXXXXXX
Its: Chief Executive Officer
EMPLOYEE:
XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx
