EXHIBIT 10.32
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of March 1,
1998 between Image Guided Technologies, Inc., a Colorado corporation (the
"Company"), and Xxxxxxx X'Xxxxxx ("X'Xxxxxx").
In consideration of the mutual covenants and conditions set forth herein,
the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby employs X'Xxxxxx in the capacity of
Vice President and Chief Operating Officer of the Company's Boulder and
Springfield operations. X'Xxxxxx accepts such employment and agrees to
perform such services as are customary to such office and as shall from time
to time be assigned to him by the Chairman of the Board, the President or the
Board of Directors.
2. TERM. Subject to earlier termination as provided in Section 5, the
employment hereunder shall be for a period of one year, commencing on March
1, 1998 (the "Commencement Date") and ending on February 28, 1999 and shall
automatically be renewed on the same terms and conditions for two additional
one-year periods unless either party notifies the other at least 90 days
prior to the expiration of the initial term or the first renewal term, as the
case may be, not to renew the Agreement (i.e., unless earlier terminated, the
initial term and the two renewal terms will end on February 28, 2001).
X'Xxxxxx'x employment will be on a full-time basis requiring the devotion of
such amount of his productive time as is necessary for the efficient
operation of the business of the Company.
3. COMPENSATION AND BENEFITS.
3.1. SALARY. For the performance of X'Xxxxxx'x duties hereunder, the
Company shall pay X'Xxxxxx an annual salary of $135,000, payable (less
required withholdings) no less frequently than twice monthly.
3.2. BENEFITS. X'Xxxxxx shall be entitled to such medical, disability
and life insurance coverage and such vacation, sick leave and holiday
benefits, if any, as are made available to the Company's top executive
personnel, all in accordance with the Company's benefits program in effect
from time to time.
3.3. REIMBURSEMENT OF EXPENSES. X'Xxxxxx shall be entitled to be
reimbursed for all reasonable expenses, including but not limited to expenses
for travel, meals and entertainment, incurred by X'Xxxxxx in connection with
and reasonably related to the furtherance of the Company's business.
3.4. OPTIONS. Notwithstanding anything to the contrary set forth in
any of his stock option agreements, if X'Xxxxxx is entitled to severance
pursuant to Section 5.2(b)(ii) below and if such severance is paid over a
period of time rather than in one lump sum, then
X'Xxxxxx'x options will continue to vest over the one year severance period
and any vested options will remain exercisable during such severance period
(but not thereafter) despite earlier termination of his employment. Such
options, however, remain subject to the terms and provisions of the stock
option plans pursuant to which they were granted including those provisions
with respect to termination in the event of a merger or sale of assets or
dissolution or liquidation of the Company.
4. CHANGE OF CONTROL. In the event of a Change of Control of the Company
(as defined below), all options then granted to X'Xxxxxx which are unvested
at the date of the Change of Control will be immediately vested. In addition,
in the event of a termination of X'Xxxxxx'x employment during the term hereof
for any reason (other than as set forth in Section 5.1(f)) following a Change
of Control, the Company will promptly pay X'Xxxxxx, in addition to the
amounts required under Section 5.2(a), severance in accordance with Section
5.2(b) below.
As used herein, a "Change of Control" of the Company shall be deemed to
have occurred:
(a) Upon the consummation, in one transaction or a series of related
transactions, of the sale or other transfer of voting power (including voting
power exercisable on a contingent or deferred basis as well as immediately
exercisable voting power) representing effective control of the Company to a
person or group of related persons who, on the date of this Agreement, is not
affiliated (within the meaning of the Securities Act of 1933) with the
Company, whether such sale or transfer results from a tender offer or
otherwise; or
(b) Upon the consummation of a merger or consolidation in which the
Company is a constituent corporation and in which the Company's shareholders
immediately prior thereto will beneficially own, immediately thereafter,
securities of the Company or any surviving or new corporation resulting
therefrom having less than a majority of the voting power of the Company or
any such surviving or new corporation; or
(c) Upon the consummation of a sale, lease, exchange or other transfer or
disposition by the Company of all or substantially all its assets to any
person or group of related persons.
5. TERMINATION.
5.1. TERMINATION EVENTS. The employment hereunder will terminate upon
the occurrence of any of the following events ("Termination Event"):
(a) X'Xxxxxx dies;
(b) The Company, by written notice to X'Xxxxxx or his personal
representative, discharges X'Xxxxxx due to the inability to perform the
duties assigned to him hereunder for a continuous period exceeding 90 days by
reason of injury, physical or mental illness or other disability, which
condition has been certified by a physician; provided, however, that prior to
discharging X'Xxxxxx due to such disability, the Company shall give a written
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statement of findings to X'Xxxxxx or his personal representative setting
forth specifically the nature of the disability and the resulting performance
failures, and X'Xxxxxx shall have a period of ten (10) days thereafter to
respond in writing to the Board of Directors' findings;
(c) X'Xxxxxx is discharged by the Board of Directors of the Company
for cause. As used in this Agreement, the term "cause" shall mean:
(i) X'Xxxxxx'x conviction of (or pleading guilty or nolo
contendere to) a felony or any misdemeanor involving dishonesty or moral
turpitude; or
(ii) (a) The willful and continued failure of X'Xxxxxx to
substantially perform his duties with the Company (other than any such
failure resulting from illness or disability) after a demand for substantial
performance is requested by the Company's Board of Directors, which
specifically identifies the manner in which it is claimed X'Xxxxxx has not
substantially performed his duties, or (b) X'Xxxxxx is willfully engaged in
misconduct which has a direct and material adverse monetary affect on the
Company. For purposes of this subpart (ii) no act or failure to act on
X'Xxxxxx'x part shall be considered "willful" unless done, or omitted to be
done, by X'Xxxxxx not in good faith and without reasonable belief that
X'Xxxxxx'x action or omission was in the best interest of the Company. No
termination shall be effected for cause pursuant to this subpart (ii) unless
X'Xxxxxx has been provided with specific information as to the acts or
omissions which form the basis of the allegation of cause, and X'Xxxxxx has
had an opportunity to be heard, with counsel if he so desired, before the
Board of Directors and such Board determines in good faith that X'Xxxxxx was
guilty of conduct constituting "cause" as herein defined, specifying the
particulars thereof in detail;
(d) X'Xxxxxx is discharged by the Board of Directors of the Company
without cause, which the Company may do at any time upon notice to X'Xxxxxx,
or if the Agreement is not renewed by the Company at the end of the initial
term or the first renewal term as provided in Section 2;
(e) X'Xxxxxx voluntarily terminates his employment due to either (i) a
default by the Company in the performance of any of its obligations
hereunder, or (ii) an Adverse Change in Duties (as defined below), which
default or Adverse Change in Duties remains unremedied by the Company for a
period of ten days following its receipt of written notice thereof from
X'Xxxxxx; or
(f) X'Xxxxxx voluntarily terminates his employment for any reason
other than the Company's default or an Adverse Change in Duties, which
X'Xxxxxx may do at any time with at least 30 days advance notice, or if the
Agreement is not renewed by X'Xxxxxx at the end of the initial term or the
first renewal term as provided in Section 2.
As used herein, "Adverse Change in Duties" means an action or series of
actions taken by the Company, without X'Xxxxxx'x prior written consent, which
results in:
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(1) A change in X'Xxxxxx'x reporting responsibilities, titles,
job responsibilities or offices which, in X'Xxxxxx'x reasonable judgment,
results in a diminution of his status, control or authority; or
(2) The assignment to X'Xxxxxx of any positions, duties or
responsibilities which, in X'Xxxxxx'x reasonable judgment, are inconsistent
with X'Xxxxxx'x positions, duties and responsibilities or status with the
Company; or
(3) A requirement by the Company that X'Xxxxxx be based or
perform his duties anywhere other than (i) at the Company's corporate office
location on the date of this Agreement, or (ii) if the Company's corporate
office location is moved after the date of this Agreement, at a new location
that is no more than 60 miles from such prior location.
5.2. EFFECTS OF TERMINATION.
(a) Upon termination of X'Xxxxxx'x employment hereunder for any
reason, the Company will promptly pay X'Xxxxxx all compensation owed to
X'Xxxxxx and unpaid through the date of termination (including, without
limitation, salary and employee expense reimbursements).
(b) In addition, if X'Xxxxxx'x employment is terminated under
Section 4 or under Sections 5.1(a), (b), (d) or (e), the Company shall also
pay X'Xxxxxx:
(i) If such termination is within the first three months
of employment, X'Xxxxxx is not entitled to any severance.
(ii) If such termination is after the first three months of
employment, the Company shall pay X'Xxxxxx xxxxxxxxx equal to 12 times his
then monthly salary; such severance to be paid, at the Company's option, in
one lump sum or at his then monthly salary commencing on the next month
following his last day of employment for 12 consecutive months (E.G., at his
current monthly salary of $11,250.00, the severance will be $135,000.00). In
addition, as long as X'Xxxxxx does not have other medical insurance, the
Company will pay X'Xxxxxx'x medical insurance for the 18-month COBRA election
period.
(a) Upon termination of X'Xxxxxx'x employment hereunder for any
reason, X'Xxxxxx agrees that for the twelve (12) month period following the
Termination Event:
(i) X'Xxxxxx will not directly or indirectly, whether for
his own account or as an individual, employee, director, consultant or
advisor, or in any other capacity whatsoever, provide services to any person,
firm, corporation or other business enterprise which is involved in the
design, development or marketing of optical localizers or image guided
surgical instruments unless he obtains the prior written consent of the Board
of Directors.
(ii) X'Xxxxxx will not directly or indirectly encourage or
solicit, or attempt to encourage or solicit, any individual to leave the
Company's employ for any reason or
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interfere in any other manner with the employment relationships at the time
existing between the Company and its current or prospective employees.
(iii) X'Xxxxxx will not induce or attempt to induce any
customer, supplier, distributor, licensee or other business relation of the
Company to cease doing business with the Company or in any way interfere with
the existing business relationship between any such customer, supplier,
distributor, licensee or other business relation and the Company.
X'Xxxxxx acknowledges that monetary damages may not be sufficient to
compensate the Company for any economic loss which may be incurred by reason
of breach of the foregoing restrictive covenants. Accordingly, in the event
of any such breach, the Company shall, in addition to any remedies available
to the Company at law, be entitled to obtain equitable relief in the form of
an injunction precluding X'Xxxxxx from continuing to engage in such breach.
If any restriction set forth in this paragraph is held to be
unreasonable, then X'Xxxxxx and the Company agree, and hereby submit, to the
reduction and limitation of such prohibition to such area or period as shall
be deemed reasonable.
6. GENERAL PROVISIONS.
6.1. ASSIGNMENT. X'Xxxxxx may not assign or delegate any of his rights
or obligations under this Agreement.
6.2. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes
any and all prior agreements between the parties relating to such subject
matter.
6.3. MODIFICATIONS. This Agreement may be changed or modified only by
an agreement in writing signed by both parties hereto.
6.4. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Company and its successors
and assigns and X'Xxxxxx and X'Xxxxxx'x legal representatives and heirs.
6.5. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of Colorado.
6.6. SEVERABILITY. If any provision of the Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect.
6.7. FURTHER ASSURANCES; COMMITTEES OF BOARD. The parties will execute
such further instruments and take such further actions as may be reasonably
necessary to carry out the intent of this Agreement. The term "Board of
Directors" shall include any committee of the Board.
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6.8. NOTICES. Any notices or other communications required or
permitted hereunder shall be in writing and shall be deemed received by the
recipient when delivered personally or, if mailed, five (5) days after the
date of deposit in the United States mail, certified or registered, postage
prepaid and addressed, in the case of the Company, to 0000-X Xxxxxxxx
Xxxxxxx, Xxxxxxx, XX 00000, and in the case of X'Xxxxxx, to the address shown
for X'Xxxxxx on the signature page hereof, or to such other address as either
party may later specify by at least ten (10) days advance written notice
delivered to the other party in accordance herewith.
6.9. NO WAIVER. The failure of either party to enforce any provision
of this Agreement shall not be construed as a waiver of that provision, nor
prevent that party thereafter from enforcing that provision or any other
provision of this Agreement.
6.10. LEGAL FEES AND EXPENSES. In the event of any disputes under this
Agreement, each party shall be responsible for their own legal fees and
expenses which it may incur in resolving such dispute.
6.11. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and X'Xxxxxx have executed this Agreement
effective as of the date first above written.
COMPANY X'XXXXXX
Image Guided Technologies, Inc.
By:
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Xxxx X. Xxx Xxxxxxx X'Xxxxxx
President Address:
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Date of Execution: Date of Execution:
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