EXHIBIT 10.60
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated September 15, 2003 between Imaging
Diagnostic Systems, Inc., a Florida corporation (the "Company"), and Xxxxxxx
X'Xxxxx (the "Executive").
WITNESSETH:
WHEREAS, The Company is engaged in the business of developing laser-based
medical optical imaging devices; and
WHEREAS, the Company has the intent to market and sell its products and
services to clients and potential clients throughout the world; and
WHEREAS, the Executive has expertise, in the medical device and imaging
industries; and
WHEREAS, the Company wishes to enter into an Employment Agreement to employ
the Executive as its Senior Vice-President, charged with all the
responsibilities and duties legally required by the State of Florida and to
oversee various broad and specific aspects of its business; and
WHEREAS, in the course of the Executive's employment, the Executive will
have access to and acquire knowledge of valuable trade secrets, confidential
information and other proprietary information belonging and relating to the
Company and its business, and which the Company has a legitimate interest in
protecting; and
WHEREAS, the Company and Executive are willing to accept such employment
and render such services, all upon and subject to the terms and conditions
contained in this Employment Agreement (the "Agreement");
NOW, THEREFORE, in consideration of the promises and the mutual covenants
set forth in this Agreement, and intending to be legally bound, the Company and
the Executive agree as follows:
1. EMPLOYMENT. The Company hereby employs the Executive and the Executive
hereby accepts employment upon the terms and condition hereinafter set forth.
2. TERM & TERMINATION.
i. Term. The Company hereby employs the Executive, and the Executive
hereby accepts employment with the Company, for a period
commencing on September 15, 2003 and ending three (3) years from
that date (the "Term").
ii. Termination without Cause. The Company may terminate the
Executive's employment without Cause. Such termination will
become effective upon the dated specified in such notice,
provided that such date is at least 60 days from the date of
specified in such notice. Upon such termination without cause:
(1) for the remainder of the term of this Agreement or for a
period of 36 months following such termination, which ever
is greater the Company will continue to pay the Executive
annual salary pursuant to Section 3(1).
(2) the Company will continue to maintain for such period, for
the benefit of the Executive, the employee benefit programs,
referred to in Section 2(b) were in effect on the date of
such termination.
(3) All options that were scheduled to vest will vest and will
remain exercisable for a period of ten (10) years from the
date of this agreement.
iii. Termination for Cause. The Company may terminate the Executive
pursuant to the terms of this Agreement at any time for cause by
giving written notice of termination. Such termination shall
become effective upon the giving of such notice, except that
termination based upon cause shall not become effective unless
Executive shall fail to correct such breach within 30 days of
receipt of written notice hereof. Upon such termination the
Executive shall have no right to compensation, commission, bonus,
benefits or reimbursement pursuant to this contract, for any
period subsequent to the termination. Further, the Executive
shall have no right to any non-unvested stock options. For
purposes of this section, "cause" shall mean; (1) the Executive
is convicted of a felony; (2) the Executive, in carrying out his
duties hereunder, has been found in a civil action by the
Company, to have committed willful gross negligence or willful
gross misconduct resulting, in either case, in material harm to
the Company; (3) the Executive misappropriates Company funds or
otherwise defrauds the Company; (4) the Executive materially
breaches any provision of this Agreement; (5) the Executive
materially fails to perform his duties under section four (4)
resulting in harm to the Company.
iv. Death or Disability. Upon the death or disability of the
Executive, the Executive shall be entitled to and the company
will pay the remaining amount of compensation from the date of
death or from the date of disability through the termination of
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this Agreement. (For purposes of this Section, "disability" shall
mean that for a period of six (6) months in any 12-month period
the Executive is incapable of substantially fulfilling his duties
because of physical, mental or emotional incapacity from injury,
sickness or disease. Should the Executive be rendered disabled,
the Company will continue to maintain for the benefit of the
employee, the employee benefit programs referred to in Section
2(b) that were in effect on the date of the disability.
v. Special Termination. In the event that (i) the executive, with or
without a change in title or formal corporate action, shall no
longer exercise all of his duties and responsibilities and shall
no longer possess substantially all the authority set forth in
Section2; or (ii) the Company materially breaches this Agreement
or the performance of its duties and obligations hereunder; or
(iii) any entity or person not now an executive officers of the
Company become either individually or as part of a group the
beneficial owner of 20% or more of the Company's common stock,
the Executive e, by written notice to the Company, may elect to
deem the Executive's employment hereunder to have been terminated
by the Company without cause under Section 2(ii) hereof, in which
event the Executive shall be entitled to the Compensation payable
pursuant to Section 3(1).
v. Voluntary Termination. The Executive, on 30 days prior written
notice to the Company, may terminate his employment voluntarily.
Upon such termination, the Company will pay the Executive's
compensation through the date of such termination. After such
date, the Executive shall no longer be entitled to receive
compensation, reimbursement, non-vested stock options or
benefits.
vi. Continuing Effect. Notwithstanding any termination of this
Agreement at the end of the Term or otherwise, the provisions of
Sections 7,8,9,10,11 and 12 shall remain in full force and effect
and the provisions of these Sections shall be binding upon the
legal representatives, successors and assigns of the Executive.
3. COMPENSATION.
1) The Company will pay the Executive an annual base salary of
$95,000 per annum in equal semi-monthly installments, salary will
be reviewed annually.
2) During the term of his employment, the Executive shall be
entitled to participate in employee benefits plans or programs of
the Company, if any, to the extent the Executive is eligible to
participate hereunder.
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a) The Company's Comprehensive Group Insurance Program
maintained by the Company.
3) The Company will reimburse or advance funds to the Executive for
all reasonable travel, entertainment and miscellaneous expenses
incurred in connection with the performance of duties under this
Agreement, provided that the Executive properly account for such
expenses tot the Company in accordance with the Company's
practices.
4) The Company shall cellular phone, and major credit card.
5) The Executive shall receive incentive options to purchase up to
an aggregate of 302,000 shares of the Company's common stock at
an exercise price of $ 1.13 per share. The options shall vest as
follows:
(i) Options to purchase up to 100,000 shares may be exercised
after 12 months (September 15, 2004) of continuous
employment.
(ii) Options to purchase up to 100,000 shares may be exercised
after 24 months (September 15, 2005) of continuous
employment.
(iii) Options to purchase up to 100,000 shares may be exercised
after 36 months (September 15, 2006) of continuous
employment.
(iv) Options to purchase up to 1,000 shares may be exercised
after 48 months (September 15, 2007) of continuous
employment.
(v) Options to purchase up to 1,000 shares may be exercised
after 60 months (September 15, 2008) of continuous
employment.
In the event that the Company experiences a change of control, defined as a
sale of the Company, the Company is acquired by another company or similar
situation, then all options vest immediately. (Please see Stock Option Agreement
2003 for specific details.) In the event the Executive is terminated without
cause, all options will vest.
Subsequent to the third year of this agreement should the Company still
employ the Executive, and the Company still wishes to retain the Executive, this
Agreement shall be renegotiated.
In the event the Executive is terminated with cause only that portion of
the option exercisable at the time of such termination of employment may
thereafter be exercised. It may not be exercised more than three (3) months
after said termination or after the expiration of the option, which ever is
sooner.
6) The Executive will be entitled to nine (9) paid holidays and five
(5) weeks of vacation for each 12-month period without loss of
compensation or other
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benefits to which she is entitled under this Agreement, to be taken at such
times as the Executive may select and the affairs of the Company may permit.
4. DUTIES.
(a) General Duties. The Executive shall be employed as the
Senior Vice-President with duties and responsibilities that are customary for
such Executive, subject to the direction of the Board of Directors and as
directed by the company by-laws. The Executive will use the standard of care
befitting of such an executive in performing duties and in discharging
responsibilities pursuant to this Agreement, which duties and responsibilities
shall be discharged competently, carefully, and faithfully.
(b) Corporate Code of Conduct. The Executive agrees to adhere
to the Company's Corporate Code of Conduct.
(b) Extent of Services. The Executive will devote all of time,
attention and energies during normal business hours (exclusive of periods of
sickness and disability and of such normal holiday and vacation periods as have
been established by the Company) to the affairs of the Company. The Executive
will not enter the employ of, or serve as a consultant to, or in any way perform
any services with or without compensation to any persons, business or
organization without the prior consent of the board of directors of the Company;
provided, that the Executive shall be permitted to devote a limited amount of
his time, without compensation, to charitable or similar organizations.
5. PLACE OF PERFORMANCE. The Executive hereby acknowledges that the Company's
existing and potential clients are located throughout the world and that the
Company is actively engaged in marketing and selling its products and services
to such clients throughout the world.
6. NON-DISCLOSURE OF INFORMATION. The Executive recognizes and acknowledges that
the Company's trade secrets and proprietary information and processes,
("Confidential Business and Technical Information") as they may exist from time
to time, are valuable, special and unique assets of the Company's business,
access to and knowledge of which are essential to the performance of the
Executive's duties hereunder.
The Executive will not, during or after the term of his employment by the
Company, in whole or in part, disclose such Confidential Business and Technical
Information to any person, firm, corporation, association or entity for any
reason or purpose whatsoever, nor shall the Executive make use of any such
Confidential Business and Technical Information for his own purposes or for the
benefit of any person, firm, corporation or entity except the Company under any
circumstances during or after the term of his employment, provided that after
the term of his employment these restrictions shall not apply to such secrets,
information and processes which are then in the public domain provided that the
Executive was not responsible, directly or indirectly, for such secrets,
information or processes entering the public domain without the Company's
consent.
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In the event an action is instituted and prior knowledge is an issue, it
shall be the obligation of the Executive to prove by clear and convincing
evidence that the Confidential Business and Technical Information disclosed was
in the public domain, was already known by the Recipient, or was developed
independently by the Recipient. The Executive agrees to hold as the Company's
property, all memoranda, books, papers, letters, formulas and other data, and
all copies thereof and there from, in any way relating to the Company's business
and affairs, whet made by him or otherwise coming into his possession, and upon
termination of his employment, or on demand of the Company, at any time, to
deliver the same to the Company.
7. NON-COMPETITION AGREEMENT.
(a) The Executive acknowledges and agrees that, pursuant to Florida Statute
Section 542.335, based on having access to and acquiring knowledge of highly
sensitive and valuable trade secrets, and confidential or proprietary
information belonging or relating to the Company, the Executive would be in a
position to cause serous and irreparable harm to the Company in the event that,
following the termination of his employment hereunder, the Executive were to
compete with or be involved in an enterprise which competes with the Company,
engages in the same business as the Company, or performs research and
development in the field of medical optical imaging.
(b) Until termination of his/ employment and for a period of 24 months
commencing on the date of termination, the Executive, directly or indirectly, in
association with or as a stockholder, director, officer, consultant, executive,
partner, joint venture, member or otherwise of or through any person, firm,
corporation, partnership, association or entity, covenants that the Executive
will not compete with the Company or any of its affiliates in the design,
manufacture, construction, offer, sale or marketing of products or services that
are competitive with the products or services offered by the Company, within the
United States or anywhere in the world. The Executive covenants and agrees that
during his employment and for a period of 24 months immediately following the
termination of such employment, the Executive will not, either individually or
in partnership or jointly or in conjunction with any person, firm, business,
corporation, partnership joint venture, entity, syndicate or association, as an
executive, principal, agent, officer director consultant, advisor, distributor,
dealer, contractor, trustee, lender, shareholder or in any manner or capacity
whatsoever, directly or indirectly, be employed by, render services to, carry on
or be engaged in, or be concerned with or be interested in or advise, lend money
to, guarantee the debts or obligations of, or in any manner participate in the
management, operation or control of any business which is directly competitive
with the business of the Company, engages in the same business as the company or
performs research and development in the medical optical imaging field with any
entity located anywhere in the world.
(c) For the purposes of this paragraph a business shall be deemed to be in
"direct competition" or "directly competitive" with the Company if such business
is engaged in developing, manufacturing, marketing, selling, or distributing
medical optical imaging devices.
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8. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. The Executive
acknowledges that during his employment he will learn and will have access to
confidential information regarding the Company and its affiliates, including
without limitation (i) confidential or secret plans, programs, documents,
agreements or material relating to the business, services or activities of the
Company and its affiliates and (ii) trade secrets, market reports, customer
investigations, customer lists and or similar information that is proprietary
information of the Company or its affiliates (collectively referred to as
"confidential information"). The Executive acknowledges that such confidential
information as is acquired and used by the Company or its affiliates is a
special, valuable and unique asset. All records, files, materials and
confidential information obtained by the Executive in the course of his
employment with the Company are confidential and proprietary and shall remain
the exclusive property of the Company or its affiliates, as the case may be. The
Executive will not, except in connection with and as required by his performance
of his duties under this Agreement, for any reason use for his own benefit or
the benefit of any person or entity with which he may be associated or disclose
any such confidential information to any person, firm, corporation, association
or other entity for any reason or purpose whatsoever without the prior written
consent of the board of directors of the Company, unless such confidential
information previously shall have become public knowledge through no action by
or omission of the Executive.
9. NON-SOLICITATION OF EXECUTIVES
The Executive covenants and agrees that while he is employed by the Company
and for a period of twenty-four (24) months immediately following the
termination of such employment, he will not, directly or indirectly, in any
manner whatsoever, on his own behalf, or on behalf of any person, firm,
business, corporation, partnership, joint venture, entity, syndicate or
association solicit, induce or cause, or attempt to induce or cause any person
who was any executive or consultant or in relationship with, or to cease
providing services to the Company.
10. REASONABLENESS OF CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION
OBLIGATION AND COVENANTS
(a) The Executive hereby acknowledges and confirms that the obligations and
covenants set out in the above paragraphs are reasonable and necessary to
protect the legitimate interests of the Company. Without limiting the generality
of the foregoing, the Executive hereby acknowledges and confirms that given,
among other things, the nature and international scope of the Company's
operations and of the employment duties to be performed by the Executive
hereunder, the geographic scope and duration of the restrictions set fourth
above are reasonable and necessary to protect the legitimate interests of the
Company.
(b) The Executive further acknowledges and agrees that these obligations
and covenants will not preclude him from becoming gainfully employed following
their termination of his employment in his/ profession.
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11. INVENTIONS.
(a) The Executive hereby sells, transfers and assigns to the Company or to
any person, or entity designated by the Company, all of the entire right, title
and interest of the Executive in and to all inventions, ideas, disclosures and
improvements, whet patented or unpatented, and copyrightable material, made or
conceived by the Executive, solely or jointly, or in whole part, during the term
hereof which (i) relate to methods, apparatus, designs, products, processes or
devices sold, leased, used or under construction or development by the Company
or any subsidiary, or (ii) otherwise relate to or pertain to the business,
functions or operations of the Company or any subsidiary, or (iii) arise wholly
or partly from the efforts of the Executive during the term hereof. The
Executive shall communicate promptly and disclose to the Company, in such form
as the Company requests, all information, details and data pertaining to the
aforementioned inventions, ideas, disclosures and improvements; and, whet during
the term hereof or thereafter, the Executive shall execute and deliver to the
Company such formal transfers and assignments and such other papers and
documents as may be required of the Executive at the Company's expense to permit
the Company or any person or entity designated by the Company to file and
prosecute the patent applications and, as to copyrightable material, to obtain
copyright thereon. Any invention by the Executive within one (1) year following
the termination of the Agreement shall be deemed to fall within the provisions
of the paragraph unless proven by the Executive to have been first conceived and
made following such termination.
(b) No Payment. The Executive acknowledges and agrees that no separate or
additional payment will be required to be made to her in consideration of her
undertakings in this Section..
12. EQUITABLE RELIEF.
(a) The Company and the Executive recognize that the services to be
rendered under this Agreement by the Executive are special, unique and of
extraordinary character, and that in the event of the breach by the Executive of
the terms and conditions of this Agreement or if the Executive, without the
prior consent of the Board of Directors of the Company, shall leave his
employment for any reason and take any action in violation of Section 6, Section
7, Section 8, or Section 9, the Company will be entitled to institute and
prosecute proceedings in any court of competent jurisdiction referred to in
Section 11(b) below, to enjoin the Executive from breaching the provisions of
Section 6 or Section 7, or Section 8. In such action, the Company will not be
required to plead or prove irreparable harm or lack of an adequate remedy at
law. Nothing contained in this Section 11 shall be construed to prevent the
Company from seeking such other remedy in arbitration in case of any breach of
this Agreement by the Executive, as the Company may elect.
(b) Any proceeding or action must be commenced in state court in Broward
County, Florida we the Company maintains its principal offices. The Executive
and the Company irrevocably and unconditionally submit to the jurisdiction of
such court and agree to take any and all future action necessary to submit to
the jurisdiction of such courts. The Executive and the Company irrevocably waive
any objection that they now have or hereafter or hereafter may have to the
laying of venue of any suit, action or proceeding brought in any such court and
further irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. Final
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judgment against the Executive or the Company in any such suit shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment, a
certified or true copy or which shall be conclusive evidence of the fact and the
amount of any liability of the Executive or the Company therein described, or by
appropriate proceedings under any applicable treaty or otherwise.
13. ASSIGNMENT. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
the Company, provided that such successor or assign shall acquire all or
substantially all of the assets and business of the Company. The Executive's
obligations hereunder may not be assigned or alienated and any attempt to do so
by the Executive will be void.
14. SEVERABILITY.
(a) The Executive expressly agrees that the character, duration and
geographical scope of the provisions set forth in this Agreement are reasonable
in light of the circumstances, as they exist on the date hereof. Should a
decision, however, be made at a later date by a court of competent jurisdiction
that the character, duration or geographical scope of such provisions is
unreasonable, then it is the intention and the agreement of the Executive and
the Company that this Agreement shall be construed by the court in such a manner
as to impose only those restrictions on the Executive's conduct that are
reasonable in the light of the circumstances and as are necessary to assure to
the Company the benefits of this Agreement. If, in any judicial proceeding, a
court shall refuse to enforce all of the separate covenants deemed included
herein because taken together they are more extensive than necessary to assure
to the Company the intended benefits of this Agreement, it is expressly
understood and agreed by the parties hereto that the provisions of this
Agreement that, if eliminated, would permit the remaining separate provisions to
be enforced in such proceeding shall be deemed eliminated, for the purposes of
such proceeding, from this Agreement.
(b) If any provision of this Agreement otherwise is deemed to be invalid or
unenforceable or is prohibited by the laws of the state or jurisdiction we it is
to be performed, this Agreement shall be considered divisible as to such
provision and such provision shall be inoperative in such state or jurisdiction
and shall not be part of the consideration moving from either of the parties to
the other The remaining provisions of this Agreement shall be valid and binding
and of like effect as though such provision were not included.
15. NOTICES AND ADDRESSES. All notices, offers, acceptance and any
other acts under this Agreement (except payment) shall be in writing, and shall
be sufficiently given if delivered to the addressees in person, by Federal
Express or similar receipted delivery, by facsimile delivery or, if mailed,
postage prepaid, by certified mail, return receipt requested, as follows:
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To the Company: Imaging Diagnostic Systems, Inc.
0000 X.X. 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
To the Executive: Xxxxxxx X'Xxxxx
0000 X.X. 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
or to such other address as either of them, by notice to the other may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
16. COUNTERPART. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Agreement may be by actual or facsimile signature.
17. ARBITRATION. Except for any controversy or claim seeking equitable
relief as provided in Section 11 of this Agreement, any controversy or claim
arising out of or relating to this Agreement, or to the interpretation, breach
or enforcement thereof or any other dispute between the parties, shall be
submitted to one arbitrator and settled by arbitration in Fort Lauderdale,
Florida, in accordance with the rules, then obtaining, of the American
Arbitration Association. Any reward made by such arbitrator shall be final,
binding and conclusive on all parties hereto for all purposes, and judgment may
be entered thereon in any court having jurisdiction thereof.
18. ATTORNEYS FEES. In the event that there is any controversy or claim
arising out of or relating to this Agreement, or to the interpretation, breach
or enforcement thereof, and any action or proceeding is commenced to enforce the
provisions of this Agreement, the prevailing party shall be entitled to
reasonable attorneys fees, costs and expenses.
19. GOVERNING LAW. This Agreement and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whet relating to its
execution, its validity, the obligations provided therein or performance shall
be governed or interpreted according to the internal laws of the State of
Florida without regard to choice of law considerations.
20. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior oral and written agreements between
the parties her with respect to the subject matter hereof. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, except by a statement in writing signed by the party or
parties against which enforcement or the change, waiver discharge or termination
is sought.
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21. ADDITIONAL DOCUMENTS. The parties hereto shall execute such
additional instruments as may be reasonably required by their counsel in order
to carry out the purpose and intent of this Agreement and to fulfill the
obligations of the parties hereunder.
22. SECTION AND PARAGRAPH HEADINGS. The section and paragraph headings
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
23. WAIVER OF BREACH. A waiver by the Company or the Executive of a
breach of any provision of the Agreement by the other party shall not operate or
be construed as a waiver of any subsequent breach by the other party.
IN WITNESS WEREOF, the Company and the Executive have executed this
Agreement as this 15th day of September 2003.
Imaging Diagnostic Systems, Inc. Executive
/s/ Xxxxx X. Xxxxxx /s/ Xxxxxxx X'Xxxxx
---------------------------- ---------------------------
Xxxxx X. Xxxxxx, CEO & COB Xxxxxxx X'Xxxxx
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