EXHIBIT 10(r)
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into this 29th day
of October , 1997, and effective September 18, 1997 (the "Effective Date")
by and between COMPUTERIZED THERMAL IMAGING, INC., a Nevada corporation
("Company"), and XXXXX X. XXXXXXXX ("Executive").
W I T N E S S E T H:
WHEREAS, the Executive has served as President and Chief Executive Officer
of the Company and during the period of his service has contributed
significantly to the development, expansion, and management of the business of
the Company in a capable and efficient manner resulting in substantial benefits
to the Company; and
WHEREAS, the Company recognizes that the Executive's experience, knowledge,
reputation and contacts will continue to be of great value to the Company and,
therefore, the Company desires to retain the benefit of such experience,
knowledge, reputation and contacts and to prevent them from being availed of by
the Company's competitors; and
WHEREAS, the Company recognizes that substantial inducements and incentives
must be offered to the Executive so that the Company may retain his services for
the future.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the receipt and sufficiency of which are hereby acknowledged, the Company and
the Executive agree as follows:
1. EMPLOYMENT.
The Company hereby agrees to employ the Executive, and the Executive
hereby accepts employment, upon the terms and conditions specified in this
Agreement.
2. DUTIES AND RESPONSIBILITIES.
2.1 The Executive shall devote his full business time, efforts, and
abilities to the Company for the profit, benefit, and advantage of the Company,
and shall promptly obey and comply with all lawful rules, regulations, and
orders that may be issued from time to time by the Company. The Executive also
agrees to perform, without additional compensation, such other executive,
management, and administrative services for any parent, subsidiary, partnership,
joint venture, or other entity affiliated with the Company as may be reasonably
necessary. The Executive shall not be required to provide such services from
any particular location.
2.2 The Executive shall be employed initially under this Agreement in
the capacity as Chief Executive Officer and shall report to the Board of
Directors of the Company. During the term hereof, the Executive shall perform
such services and functions as may be designated from time to time by the
Company.
2.3 The Executive represents and warrants that Executive has no prior
obligations, written or oral, including confidentiality agreements or other
agreements, which restrict Executive's ability to enter into this Agreement or
to perform any duties for the Company. Executive agrees to indemnify and hold
harmless the Company from any and all legal actions in which it is alleged or
asserted that Executive has such obligations or agreements including, but not
limited to, paying the Company's attorney's fees, costs, and any damages the
Company may be assessed.
3. COMPENSATION.
3.1 In consideration for his services provided hereunder during the
term of the Executive's employment under this Agreement and the covenants
contained in this Agreement, the Executive shall be entitled to receive monetary
compensation as determined by the Board of Directors in its sole discretion
("Salary"). Any Salary
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owed shall be payable in accordance with the usual payroll practices of the
Company and subject to all customary payroll deductions. The Salary may be
increased at any time during the course of the Executive's term of employment
at the sole discretion of the Company.
3.2 The Executive shall receive, in addition to Salary, an option
to purchase common stock of the Company, as more fully described and subject
to: (i) the conditions set forth in the Employee Stock Option Agreement,
attached hereto as EXHIBIT "A" and incorporated by reference herein, and (ii)
that certain 1997 Stock Option and Restricted Stock Plan (the "Plan") of the
Company, attached hereto as EXHIBIT "B".
3.3 During the term of the Executive's employment under this
Agreement, the Executive also shall be entitled to receive the following:
(i) participation in the Company's present and future benefit plans
generally offered to other employees;
(ii) reimbursement of reasonable expenses related to the performance
of his duties hereunder; provided, however, that in order to be reimbursed the
Executive must submit vouchers or other satisfactory evidence of such expenses
as required by Company policies; and
(iii) three (3) weeks of vacation (paid, if a Salary has been set
by the Board of Directors) per work year earned ratably per year and all
holidays for which the Company is not open for business.
4. TERM AND TERMINATION.
4.1 The term of the Executive's employment under this Agreement
shall commence on the Effective Date and shall continue thereafter for a
period of three (3) years, but shall be renewed for successive one (1) year
terms thereafter unless and until either party provides written notice of
non-renewal at least fourteen (14) days prior to the annual renewal date.
Notwithstanding the foregoing, the Executive may terminate this Agreement for
any reason by giving the Company at least fourteen (14) days written notice.
If the Executive voluntarily terminates this Agreement, the Company shall
have no further financial liability to the Executive beyond the effective
date of such termination.
4.2 Notwithstanding anything in this Agreement to the contrary, the
Executive's employment with the Company may be terminated immediately at any
time by the Company for "cause" which shall mean upon the occurrence of any of
the following events:
(i) breach or attempted breach by Executive of any provision of
this Agreement or negligent or unsatisfactory performance of his duties;
(ii) breach or attempted breach by Executive of fiduciary duties owed
to the Company as an officer and/or director, including the misappropriation or
attempted misappropriation of funds or property of the Company;
(iii) attempting to or securing any personal profit or benefit
by Executive not thoroughly disclosed to and approved by the Board of
Directors in connection with any transaction entered or to be entered on
behalf of the Company or any affiliate;
(iv) conduct on any part of the Executive, even if not in connection
with the performance of his duties hereunder, which would result in serious
prejudice to the interests or reputation of the Company including, without
limitation, conviction of a felony criminal offense; or
(v) if, for a continuous period of thirty (30) calendar days, or for
more than thirty (30) calendar days in any calendar year, excluding any
authorized vacation or authorized leave of absence, the Executive is absent or
expected to be absent from his full time employment or is otherwise unable to
perform his duties, as reasonably
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determined by a disinterested physician selected by the Company, by reason of
illness, injury, or mental or physical disability.
4.3 In the event of termination of employment, the Executive shall
be entitled to receive (i) the Salary compensation due, if any, on a pro-rata
basis, (ii) reimbursement of expenses to the effective date of termination,
and (iii) an amount, if any, equal to any earned but unused vacation time
based upon the then Salary, if any, computed on a daily basis subject to all
customary payroll deductions.
5. CONFIDENTIAL INFORMATION AND DISCOVERIES OF THE COMPANY.
5.1. INTELLECTUAL PROPERTY. Executive hereby assigns to the Company
all inventions, processes, discoveries, creations and improvements (whether or
not patentable) which are conceived, made or learned by Executive alone or
jointly with others in the course of his employment with the Company that
pertain to the business interests of the Company or relating to areas which may
be reasonably anticipated to be encompassed by such business interests of the
Company at the time of conception. Executive, at any time during or after his
employment, agrees to promptly disclose to the Company all such processes,
inventions, discoveries, creations or improvements assigned hereby. All works
of authorship created by the Executive on behalf of the Company during the term
of this Agreement, solely or jointly with others, shall be considered works made
for hire under the Copyright Act of 1976, as amended, and shall be owned
entirely by the Company. Executive will also, at the Company's expense,
cooperate in all lawful acts which may be necessary or desirable in the judgment
of the Company to protect or vest title to such inventions, processes,
discoveries, creations or improvements in the Company or its nominee, including,
without limitation, applying for, obtaining, maintaining, and enforcing patents
thereon in all countries of the world, and the execution of documents related
thereto.
5.2. CONFIDENTIAL INFORMATION. The Executive acknowledges that in
the performance of his services and duties hereunder he will receive or come
in contact with, among other things, trade secrets (both technical and
non-technical), know-how, lists of customers, suppliers, contractors,
customers, employee records and other confidential and proprietary
information about the business of the Company (hereinafter collectively
referred to as "Confidential Information"). The Executive further
acknowledges that such Confidential Information was obtained at substantial
cost to the Company and provides the Company with a significant advantage
over competitors. The Executive understands that such Confidential
Information is the sole property of the Company, and agrees that both during
and after his employment with the Company he will not at any time use or
reveal Confidential Information to anyone except as permitted by the Company
or required by Executive's employment duties with the Company. The Executive
further agrees not to use any information made available to or coming into
the possession of the Executive in a manner that is adverse to the business
of the Company. Upon termination of employment hereunder, the Executive
agrees to surrender to the Company all papers, documents, writings and other
property produced by him or coming into his possession by or through his
employment hereunder, and the Executive agrees that all such materials and
Confidential Information will at all times remain the property of the
Company.
6. AGREEMENT NOT TO SOLICIT.
As an express condition to this Agreement, the Executive agrees,
during the term of his employment, and for a period of two (2) years after the
termination of his employment with the Company for any reason, the Executive
will not, directly or indirectly, for his own account or for the account of
others, induce any of the Company's employees to leave their employment, nor
will the Executive in any other way interfere with the employee relations of the
Company.
7. NON-COMPETITION.
7.1 The Executive acknowledges that he shall receive special training
and knowledge from the Company, including access to information as detailed in
Section 5.2. The Executive acknowledges that this information is valuable to
the Company and, therefore, its protection and maintenance constitutes a
legitimate interest to be protected by the Company by this covenant not to
compete. Therefore, the Executive agrees that during his employment with the
Company, and for a period of two (2) years after the termination of his
employment with the
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Company for any reason, the Executive will not, directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director, or in any other individual or
representative capacity, engage or participate in any business that is in
competition in any manner whatsoever with the business of the Company on the
date of termination of employment within 50 miles of each city in which the
Company is conducting substantial business. Notwithstanding the preceding
sentence to the contrary, the Executive may purchase or otherwise acquire up
to (but not more than) one percent (1%) of any class of securities of any
enterprise (but without otherwise participating in the activities of such
enterprise) if such securities are listed on any national or regional
securities exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934. The Executive represents to the Company
that his experience and capabilities are such that the enforcement of the
restrictions contained in this Section 7 would not be unduly burdensome to
the Executive.
8. REMEDIES.
The Executive acknowledges that the provisions of Sections 5, 6,
and 7 shall survive the termination of Executive's employment with the
Company and are reasonable and necessary for the protection of the Company
and that the Company will be irrevocably damaged if such provisions are not
specifically enforced. Accordingly, in the event of breach or threatened
breach of the provisions of Sections 5, 6, or 7, it is understood and agreed
that the Company shall be entitled to injunctive relief (without bond or
other security being required) as well as any and all other applicable
remedies at law and in equity. Should a court of competent jurisdiction
declare any of these provisions unenforceable due to an unreasonable
restriction, or for any other reason, such court shall have the express
authority of the parties to this Agreement to reform such provisions and/or
to grant the Company any and all other relief, at law or in equity,
reasonably necessary to protect the interests of the Company. The Executive
expressly acknowledges that (i) he has been encouraged to obtain separate
legal counsel in connection with the negotiation of this Agreement who can
explain the legal effects of these provisions and (ii) he considers these
provisions to be reasonable.
9. SUBMISSION TO JURISDICTION.
Each party hereby irrevocably submits to the personal jurisdiction
of the United States District Court for Xxxxxx County, Texas, as well as of
the District Courts of the State of Texas in Xxxxxx County, Texas over any
suit, action or proceeding arising out of or relating to this Agreement.
Each party hereby irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the laying of the venue
of any such mediation, arbitration, suit, action or proceeding brought in any
such county and any claim that any such mediation, arbitration, suit, action
or proceeding brought in such county has been brought in an inconvenient
forum.
10. ALTERNATIVE DISPUTE RESOLUTION.
ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR THE BREACH, TERMINATION, OR VALIDITY THEREOF, SHALL BE SETTLED
BY FINAL AND BINDING ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION ("AAA RULES") IN
EFFECT AS OF THE EFFECTIVE DATE OF THIS AGREEMENT. THE AMERICAN ARBITRATION
ASSOCIATION ("AAA") SHALL BE RESPONSIBLE FOR (i) APPOINTING A SOLE
ARBITRATOR, AND (ii) ADMINISTERING THE CASE IN ACCORDANCE WITH THE AAA
RULES. THE SITUS OF THE ARBITRATION SHALL BE HOUSTON, TEXAS. UPON THE
APPLICATION OF EITHER PARTY TO THIS AGREEMENT, AND WHETHER OR NOT AN
ARBITRATION PROCEEDING HAS YET BEEN INITIATED, ALL COURTS HAVING JURISDICTION
HEREBY ARE AUTHORIZED TO: (a) ISSUE AND ENFORCE IN ANY LAWFUL MANNER, SUCH
TEMPORARY RESTRAINING ORDERS, PRELIMINARY INJUNCTIONS AND OTHER INTERIM
MEASURES OF RELIEF AS MAY BE NECESSARY TO PREVENT HARM TO A PARTIES INTEREST
OR AS OTHERWISE MAY BE APPROPRIATE PENDING THE CONCLUSION OF ARBITRATION
PROCEEDINGS PURSUANT TO THIS AGREEMENT; AND (b) ENTER AND ENFORCE IN ANY
LAWFUL MANNER SUCH JUDGMENTS FOR PERMANENT EQUITABLE RELIEF AS MAY BE
NECESSARY TO PREVENT HARM TO A PARTIES INTEREST OR AS OTHERWISE MAY BE
APPROPRIATE FOLLOWING THE ISSUANCE OF ARBITRAL AWARDS PURSUANT TO THIS
AGREEMENT. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH PARTY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT TO CONSEQUENTIAL, EXEMPLARY,
OR PUNITIVE DAMAGES REGARDLESS OF THE FORUM FOR THE PROCEEDINGS. ANY ORDER
OR JUDGEMENT RENDERED BY THE ARBITRATOR MAY BE ENTERED AND ENFORCED BY ANY
COURT HAVING COMPETENT JURISDICTION.
11. MISCELLANEOUS.
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11.1 NOTICES. Any notice required or permitted under this Agreement
shall be in writing and shall be deemed to be delivered three (3) business days
after deposit in the United States mail, postage prepaid, certified or
registered mail, return receipt requested, addressed as follows:
Company: Computerized Thermal Imaging, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxx 00000
Executive: Xxxxx X. Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxx 00000
Notice given in any other manner shall be effective when delivered to
the addressee. The address for notice may be changed by notice given in
accordance with this provision.
11.2 AMENDMENTS. This Agreement and the documents referred to
herein constitute the entire agreement between the parties with respect to
the employment of the Executive and supersedes any prior agreements and may
not be amended, supplemented, waived, modified, or amended except by written
instrument executed by the parties hereto. There are no oral agreements
between the parties.
11.3 PRESERVATION OF BUSINESS: FIDUCIARY RESPONSIBILITY. The
Executive shall use his best efforts to preserve the business and
organization of the Company, to keep available to the Company the services of
its employees, to preserve the business relations of the Company, and the
Executive shall not commit any act that might reasonably be expected to
injure the Company. The Executive shall observe and fulfill proper standards
of fiduciary responsibility attendant upon his service and office.
11.4 ASSIGNMENTS. The Company may not assign this Agreement without
the consent of the Executive, except in connection with a sale of substantially
all of the assets of the Company or the merger or consolidation of the Company
with a successor entity provided in such events such transferee entity assumes
all of the obligations of the Company pursuant to this Agreement. The rights
and obligations of the Executive hereunder are personal to him, and no such
rights, benefits, duties or obligations shall be subject to voluntary or
involuntary alienation, assignment, or transfer.
11.5 EFFECT OF AGREEMENT. This Agreement shall be binding upon the
Executive and his heirs, executors, administrators, and legal representatives
and upon the Company and its successors and assigns.
11.6 WAIVER OF BREACH. The waiver by either party hereto of a
breach of any provision of this Agreement by the other party hereto shall not
operate or be construed as a waiver by such party of any subsequent breach of
such other party.
11.7 GOVERNING LAW. This Agreement and all matters relating thereto
shall be governed by and construed in accordance with the laws of the State of
Texas without regard to any conflicts of laws provisions thereof.
11.8 SEVERABILITY. If any provision of this Agreement is declared
unenforceable, such declaration shall not affect the validity of any other
provision of this Agreement.
11.9 CONSTRUCTION. The headings contained in this Agreement are
for reference purposes only and shall not affect this Agreement in any manner
whatsoever. Wherever required by the context, any gender shall include any
other gender, the singular shall include the plural, and the plural shall
include the singular.
IN WITNESS WHEREOF, INTENDING TO BE LEGALLY BOUND, the undersigned have
executed this Consent in multiple counterparts, to be effective as of the date
and time first mentioned above, each of which together shall be considered one
original, and whether by original or facsimile signature shall be effective in
all respects as
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though an original. The Executive acknowledges that he has read this
Agreement and has been represented by separate legal counsel and he
understands that executing this Agreement is a condition of his employment by
the Company.
COMPANY:
COMPUTERIZED THERMAL IMAGING, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------------------
Xxxxx Xxxxxx, President
EXECUTIVE:
/s/ Xxxxx X. Xxxxxxxx
------------------------------------------------
Xxxxx X. Xxxxxxxx
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