EMPLOYMENT AGREEMENT
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AGREEMENT, dated as of December 1, 1995, between
MEDICAL DIAGNOSTICS, INC., a Delaware corporation (the
"Company"), and XXXXX X. XXXXXX (the "Executive").
W I T N E S S E T H:
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WHEREAS, the Executive has been employed by the
Company as an executive officer and recently became the
President of the Company, and the Company and the Executive
now desire to enter into an agreement providing for the
continuation of their relationship, subject to the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the Company and
the Executive agree as follows:
1. Employment. The Company hereby employs the
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Executive in the position of President of the Company (the
"President"), and the Executive hereby accepts such
employment and agrees to perform services as President for
the Company for the period and upon the other terms and
conditions set forth in this Agreement.
2. Durational Term. The durational term of the
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Executive's employment (the "Initial Term") shall be for a
period commencing as of December 1, 1995 (the "Effective
Date") and terminating on June 30, 1999. This Agreement
shall be automatically extended for an additional three year
term (the "Renewal Term") unless either the Company or the
Executive gives the other written notice that the Agreement
is not to be renewed, which notice shall be given not less
than one hundred and eighty (180) days prior to the end of
the Initial Term. (The Initial Term and the Renewal Term (as
applicable) sometimes collectively, the "Term".)
Notwithstanding the Term hereof, the Executive's employment
hereunder is subject to earlier termination as hereinafter
specified.
3. Position and Duties.
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3.01 Service with the Company. The Executive
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agrees to perform his executive employment duties consistent
with the position as the President, and as the Chairman of
the Board or the Board of Directors (the "Board") of the
Company shall assign to him from time to time, provided such
assignments are consistent with the position of President.
The Executive shall report to the Chairman of the Board of
the Company, the Executive Committee of the Board and to the
Board. The Executive also agrees to serve during the Term
hereof, as requested by the Board and without any additional
compensation, as a director of the Company and its parent
Advanced NMR Systems, Inc., a Delaware corporation ("ANMR"),
if elected by the stockholders or the Board of Directors of
ANMR, and as a director and officer of any subsidiaries of
the Company, from time to time in effect. The Executive
agrees that if upon termination of his employment hereunder
he is then serving as a director of the Company, any of its
subsidiaries and of ANMR, he shall cease all such
directorships and, if requested, he shall submit written
resignations thereof.
3.02 Performance of Duties. The Executive agrees
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to serve the Company faithfully and to the best of his
ability and to devote the time, attention and efforts
necessary to advance the business and affairs of the Company
during the Term hereof. It is understood that the Executive
shall devote his full and exclusive business time to the
Company and any of its subsidiaries. During the Term hereof,
the Executive shall not serve as an officer, director,
employee, proprietor, partner, consultant or advisor to any
other corporation or entity not affiliated with the Company
without the prior written consent of the Board.
4. Compensation.
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4.01 Base Salary. As compensation for all
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services to be rendered by the Executive under this
Agreement, the Company shall pay to the Executive an annual
base salary (the "Base Salary") of not less than $225,000.
The Base Salary shall be paid in installments in accordance
with the Company's normal payroll procedures and policies.
The Base Salary shall increase by a minimum of 10% on the
first anniversary of the Effective Date, not subject to any
condition, and by a minimum of 10% on the second anniversary
of the Effective Date, subject to achieving performance
targets that shall be mutually agreed upon by the Executive
and by either the Board or the Compensation Committee of
ANMR.
4.02 Bonus. In addition to the Base Salary, the
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Executive shall be eligible for an annual bonus (the "Bonus")
upon the Company achieving performance targets, based on
quantifiable criteria such as net income or operating income,
and for amounts as mutually determined by the Executive and
by either the Board or the Compensation Committee of ANMR.
4.03 Stock Options. The Executive shall be
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granted stock options under the XXXX 0000 Employee Stock
Option Plan for the purchase of 150,000 shares of ANMR Common
Stock, exercisable over five (5) years and with one-third of
the shares to vest on the Effective Date, and one-third of
the shares to vest on each successive anniversary of the
Effective Date, and subject to the other terms as provided
herein and in the Stock Option Agreement therefor. The
Executive may be granted additional stock options as
determined by the Option Committee of ANMR.
4.04 Participation in Benefit Plans. The
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Executive shall also be entitled, to the extent that his
position, title, tenure, salary, age, health (as to life
insurance only) and other qualifications make him eligible,
to participate in all employee benefit plans or programs
(including medical/dental and life insurance, retirement,
pension, vacation time, sick leave and holidays) of the
Company and ANMR currently in existence on the date hereof or
as may hereafter be instituted from time to time to the same
extent as available to other executive officers consistent
with their positions and prior service with the Company and
ANMR. The Company shall use its best efforts to maintain the
current disability insurance policy covering the Executive
which provides a benefit upon his disability (as defined in
such policy) equal to 60% of the Executive's annual Base
Salary at the time of any disability (the "Disability
Insurance Policy"). In the event the Disability Insurance
Policy is terminated, the Company shall use its best efforts
to obtain a policy with substantially similar coverage as
that provided for in the Disability Insurance Policy. The
Executive's participation in any such plan or program shall
be subject to the provisions, rules and regulations
applicable thereto. The Executive shall make himself
available for medical examinations in connection with the
Company obtaining any insurance on the life of the Executive.
4.05 Vacations. The Executive shall be eligible
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for six (6) weeks vacation with unlimited accrual rights;
provided, however, that such vacation may only be taken in
maximum increments of four consecutive weeks.
4.06 Expenses. The Company shall pay the
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Executive a sum of $500 per month for car expenses. In
accordance with the Company's policies, as established from
time to time, the Company shall pay or reimburse the
Executive for all reasonable and necessary out-of-pocket
expenses incurred by him in the performance of his duties to
the Company under this Agreement.
5. Confidential Information.
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5.01 Confidentiality. Except as permitted or
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directed by the Company's Board, the Executive shall not
during the Term of this Agreement nor at any time thereafter
divulge, furnish or make accessible to anyone for use in any
way (other than in the ordinary course of the business of the
Company) any confidential or secret knowledge or information
of the Company or any of its subsidiaries or affiliates
(including ANMR) which the Executive has acquired or become
acquainted with prior to the termination of his employment by
the Company, whether developed by himself or by others,
concerning any trade secrets, confidential or secret business
plans, designs, devices or material (whether or not patented
or patentable) directly or indirectly useful in any aspect of
the business of the Company, and confidential client or
supplier lists of the Company, any confidential or secret
development or research work of the Company, or any other
confidential or secret aspects of the business of the
Company. The Executive acknowledges that the above-described
knowledge or information constitutes a unique and valuable
asset of the Company acquired at great time and expense by
the Company, and that any disclosure or other use of such
knowledge or information other than for the sole benefit of
the Company would be wrongful and would cause irreparable
harm to the Company. The foregoing obligations of
confidentiality, however, shall not apply to any knowledge or
information which is now published or which subsequently
becomes generally publicly known, other than as a direct or
indirect result of the breach of this Agreement by the
Executive, or the disclosure of which is required by law.
For purposes of this Section 5.01, "Company" shall mean
Medical Diagnostics, Inc., ANMR and their respective
subsidiaries and affiliates.
5.02 Disclosure and Assignment. The Executive
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shall promptly disclose in writing to the Company complete
information concerning each and every invention, discovery,
device, design, practice, process, method or product, whether
patentable or not, made, developed, devised, conceived or
first reduced to practice by the Executive within his duties
and corporate responsibilities, either solely or in
collaboration with others, during the Term of this Agreement,
or within six (6) months thereafter, whether or not during
regular working hours, relating directly to the business,
products or practices of the Company or any of its
subsidiaries or affiliates (hereinafter referred to as
"Inventions"). The Executive, to the extent that he has the
legal right to do so, hereby acknowledges that any and all of
said Inventions are the property of the Company, and hereby
assigns and agrees to assign to the Company any and all of
the Executive's right, title and interest in and to any and
all of said inventions.
6. Non-Competition.
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6.01 Non-Competition. The Executive recognizes
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that the services to be performed by him for the Company are
special and unique. The Executive further recognizes that
the nature of the Company's business is such that the
Executive will have full knowledge of the Company's business
plans, practices and secrets. The parties therefore confirm
that, in order to protect the Company's goodwill, it is
necessary that the Executive agree, and the Executive hereby
does agree that during the Term of his employment hereunder
and for a period of one (1) year following the termination of
such employment, he shall not engage in competition with the
Company, including any of its subsidiaries or affiliates
(including ANMR) (collectively, the "Business Entities") by
being an employee, sole proprietor, stockholder, partner,
member, consultant to or otherwise associated with an entity
engaged in business within a 250 mile radius of a business
operation in which any of the Business Entities is then
engaged, or has engaged in at any time during the six-month
period prior to the termination of this Agreement, or is
planning to commence operation within six months after
termination of this Agreement (the "Competitive Business").
6.02 Application. The restrictions in this
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Section 6 shall not apply with respect to (i) a passive
investment by the Executive of less than 5% of the
outstanding shares of capital stock of any corporation or of
the equity of any other entity, (ii) employment by the
Executive with an entity at which he is employed solely in a
management capacity in an area of business which does not,
directly or indirectly, include a Competitive Business, or
(iii) a termination of this Agreement pursuant to Section
7.07 hereof.
6.03 Remedies. The Executive agrees that any
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breach or threatened breach by him of any provision of this
Agreement shall entitle the Company, in addition to any other
legal remedies available to it, to apply to any court of
competent jurisdiction to enjoin such breach or threatened
breach.
7. Termination.
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7.01 Disability of the Executive. The Executive
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shall be considered disabled if, due to illness or injury,
either physical or mental, he is unable to perform his
customary duties and responsibilities as required by this
Agreement for the minimum period provided for in the
Disability Insurance Policy. The determination that the
Executive is disabled shall be made as provided for in the
Disability Insurance Policy then in effect or, in absence of
such a Policy, by the Executive Committee or by the Board
based upon an examination and certification by a physician
selected by the Company subject to the Executive's approval,
which approval shall not be unreasonably withheld, and using
the criteria as provided for in the last effective Disability
Insurance Policy that covered the Executive. The Executive
agrees to submit timely to any required medical or other
examination, provided that such examination shall be
conducted at a location convenient to the Executive and that
if the examining physician is other than the Executive's
personal physician, the Executive shall have the right to
have his personal physician present at such examination.
7.02 Effect of Disability. If the Executive is
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determined to be disabled pursuant to Section 7.01 hereof,
within (30) days of such determination of disability, the
Company shall have the option to terminate this Agreement by
written notice to the Executive stating the date of
termination, which date may be at any time subsequent to the
date of such determination. Upon termination of this
Agreement due to disability as provided herein, (i) the
Company shall pay to the Executive the accrued amount of the
Base Salary (including any earned Bonus), prorated through
the date of termination (other than expense reimbursements
which shall be paid in full), as and when such amounts would
be paid but for the termination of this Agreement, (ii) the
Executive's participation in the Company's health plan shall
continue at the expense of the Company for a period of ninety
(90) days, provided the Executive does not obtain any
employment during that time which provides him with
comparable health plan coverage, and thereafter the Executive
shall have his applicable COBRA rights in accordance with
Company policies, and (iii) for a period of two (2) years,
the Company shall pay to the Executive an amount equal to (A)
sixty (60%) of his then Base Salary less (B) the aggregate
amount of all benefits received under the Disability
Insurance Policy, payable in accordance with the Company's
payroll practices.
7.03 Death. If the Executive shall die during
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the Term of this Agreement, this Agreement and the
Executive's employment hereunder shall terminate immediately
upon the Executive's death. Upon such termination, (i) the
Company shall pay to the Executive's estate the accrued
amount of the Base Salary (including any earned Bonus),
benefits, reimbursements or other sums payable pursuant to
this Agreement, and (ii) the Company shall continue to pay to
the Executive's estate for a period of one (1) year an amount
equal to the Base Salary in effect at his death, payable in
twelve (12) equal monthly installments, commencing on the
first day of the month immediately following the month in
which the Executive died.
7.04 By The Company For Cause. Upon
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authorization by the Board, the Company may terminate this
Agreement for cause at any time. For purposes of this
Section 7.04, the term "cause" shall be limited to (i) the
willful and continued failure by the Executive to perform
substantially his duties with the Company (other than any
such failure resulting from incapacity due to physical or
mental illness), (ii) the conviction of the Executive by a
court of competent jurisdiction of a crime, or (iii) the
willful engaging by the Executive in illegal conduct which is
materially and demonstrably injurious to the Company;
provided, however, that with respect to clauses (i) and
(iii), the failure to perform or the conduct (if curable) is
not cured within thirty (30) days after receipt of written
notice thereof from the Company which specifically identifies
the manner(s) which the Board or the Chairman of the Company
believes constitutes failure to perform or conduct. In the
event this Agreement is terminated pursuant to this
Section 7.04, the Executive shall not be entitled to any
compensation other than his then current Base Salary or any
payments owed by the Company to the Executive which have
accrued through his date of termination, subject to the
Company's right of offset based upon debts owed by the
Executive to the Company.
7.05 By The Company Not For Cause. If the
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Company terminates this Agreement other than for cause as
defined in Section 7.04 hereof prior to the end of the then
Term hereof, the Executive shall be entitled to (i) the
continuation of his then Base Salary for the balance of the
Term, but not less than two (2) years' Base Salary, payable
as to fifty (50%) percent of such amount within thirty (30)
days after the date of termination and the remaining fifty
(50%) percent in equal monthly installments over the
applicable period, (ii) any payments (including earned Bonus)
owed by the Company to the Executive which have accrued
through his date of termination, (iii) any Bonus through the
end of the current fiscal year, and (iv) the continuation of
his health insurance coverage at the expense of the Company
for a period of one (1) year subject to termination of such
benefits upon the Executive becoming covered by a comparable
plan offered by a subsequent employer and subject to any
changes in such plan as applicable to other executive
officers, and thereafter the Executive shall have his
applicable COBRA rights in accordance with Company policies.
Upon termination of this Agreement pursuant to this
Section 7.05, any outstanding unvested stock options granted
to the Executive by ANMR shall vest and be immediately
exercisable for a period of twelve (12) months from the date
of termination or until the stock options expiration date,
whichever is earlier.
7.06 By the Executive for Cause. (a) The
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Executive may terminate this Agreement for cause at any time
upon written notice to the Company, which must be given not
more than thirty (30) days after the Executive has knowledge
of the action giving rise to the cause. The notice must
specifically identify the act constituting the cause and if
such act is curable the Company shall have thirty (30) days
after receipt of such notice to cure such cause. For
purposes of this Section 7.06, the term "cause" shall be
limited to:
(i) a material adverse change in the status
or position of the Executive as a senior executive
of the Company from that in effect as of the
Effective Date, or any removal from such position
(except in connection with the termination of this
Agreement pursuant to Section 7.01, 7.02, 7.03,
7.04 or 7.05 hereof);
(ii) a reduction by the Company in the Base
Salary;
(iii) the failure by the Company to continue
in effect any employee plan in which the Executive
is participating (or plans providing at least
substantially similar benefits) other than as a
result of the normal expiration of any such plan in
accordance with its terms, or the taking of any
action, or the failure to act, by the Company which
would adversely affect the Executive's continued
participation in any of such plans;
(iv) the failure by the Company to provide
and credit the Executive with the number of paid
vacation days to which he is then entitled pursuant
to this Agreement; or
(v) the Company's requiring the Executive
to be based at any office that is more than fifty
(50) miles from where his office is presently
located except for required travel on the Company's
business to an extent substantially consistent with
the business travel obligations required in the
performance of the Executive's employment.
(b) In the event that the Executive terminates
this Agreement pursuant to this Section 7.06, the Executive
shall be entitled to a severance allowance equal to (x) twice
his then current Base Salary if the remainder of the then
Term is at least twelve (12) full months or (y) twice the
amount of the current Base Salary that otherwise would be
payable for the remainder of the then Term, if the remainder
of the then Term is less than twelve (12) months, payable as
to fifty (50%) percent of the applicable amount within thirty
(30) days after the date of termination and the remaining
fifty (50%) percent in equal monthly installments over the
applicable period. The severance allowance provided for in
this Section 7.06 shall be in lieu of and shall supersede all
prior severance provisions contained in any other prior
agreement between the Executive and the Company. In
addition, the Executive shall be entitled to (i) any payments
(including earned Bonus) owed by the Company to the Executive
which have accrued through his date of termination, (ii) any
Bonus through the end of the current fiscal year, and (iii)
the continuation of his health insurance coverage at the
expense of the Company for a period of one (1) year subject
to termination of such benefits upon the Executive becoming
covered by a comparable plan offered by a subsequent employer
and subject to any changes in such plan as applicable to
other executive officers, and thereafter the Executive shall
have his applicable COBRA rights in accordance with Company
policies. Upon termination of this Agreement pursuant to
this Section 7.06, any unvested stock options granted to the
Executive by ANMR shall vest and be immediately exercisable
for a period of twelve (12) months or until the stock options
expiration date, whichever is earlier.
7.07 Change in Control. (a) For purposes of
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this Agreement, a "Change in Control" means and shall be
deemed to occur if any of the following occurs:
(i) an acquisition, by an individual, entity
or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) of beneficial
ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 30% or more
of either (A) the outstanding shares of common
stock, par value $.01 per share, of ANMR (the
"Common Stock"), or (B) the combined voting power
of the voting securities of ANMR entitled to vote
generally in the election of directors (the "Voting
Securities");
(ii) individuals who, on January 1, 1996,
constituted the Board (the "Incumbent Board") of
ANMR, cease for any reason to constitute at least a
majority of the Board, provided, however, that any
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individual becoming a director subsequent to
January 1, 1996 whose election, or nomination for
election by the ANMR stockholders, was approved by
a vote of at least a majority of the directors then
serving and comprising the Incumbent Board shall be
considered as though such individual were a member
of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial
assumption of office occurs as a result of either
an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents;
(iii) approval by the Board or the
stockholders of ANMR of (A) a tender offer to
acquire 30% or more of the Common Stock or Voting
Securities, (B) a reorganization, (C) a merger, or
(D) a consolidation, other than a reorganization,
merger or consolidation with respect to which all
or substantially all of the individuals and
entities who were the beneficial owners,
immediately prior to such reorganization, merger or
consolidation, of the Common Stock and Voting
Securities beneficially own, directly or
indirectly, immediately after such reorganization,
merger or consolidation, more than 70% of the then
outstanding Common Stock and Voting securities
(entitled to vote generally in the election of
directors) of the corporation resulting from such
reorganization, merger or consolidation in
substantially the same proportions as their
respective ownership, immediately prior to such
reorganization, merger or consolidation, of the
Common Stock or the Voting Securities; or
(iv) approval by the Board or the ANMR
stockholders of (A) a complete or substantial
liquidation or dissolution of the Company or ANMR,
(B) the sale or other disposition of all or
substantially all of the assets of the Company or
ANMR, or (C) a merger of the Company with or into a
corporation not controlled, directly or indirectly,
by ANMR.
(b) If, at any time during the Term hereof, a
Change in Control (as defined in Subsection (a) above)
occurs, then within sixty (60) days after his receipt of
written notice of such Change in Control, the Executive may,
by written notice to the Company (or its successor),
terminate this Agreement. In the event of such termination,
the Executive shall receive a lump sum payment equal to 2.99
times his then current Base Salary, payable within thirty
(30) days after termination of this Agreement; provided,
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however, if the amount to be paid or distributed to the
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Executive pursuant to this Section 7.07 (taken together with
any amounts otherwise to be paid or distributed to the
Executive by the Company) (such amounts collectively the
"Section 7.07 Payment") would result in the application of an
excise tax under Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code"), or any successor or similar
provision thereto, (the "Code"), the Section 7.07 Payment
shall not be paid or distributed in the amounts or at the
times otherwise required by this Agreement, but shall instead
be paid or distributed annually, beginning within thirty (30)
days after the termination date pursuant to this Section 7.07
hereof and thereafter on each anniversary thereof, in the
maximum substantially equal amounts and over the minimum
number of years that are determined to be required to reduce
the aggregate present value of Section 7.07 Payment to an
amount that will not cause any Section 7.07 Payment to be
non-deductible under Section 280G of the Code. For purposes
of this Section 7.07, present value shall be determined in
accordance with Section 280G(d)(4) of the Code. All
determinations to be made under the foregoing proviso to this
Section 7.07 shall be made by the accounting firm which
served as the independent public accountant of ANMR
immediately prior to the Change of Control (the "Accounting
Firm"), which firm shall provide its determinations and any
supporting calculations both to the Company and the Executive
within twenty (20) days of the termination date. Any
determination by the Accounting Firm shall be binding upon
the Company and the Executive. In addition, all unvested
stock options granted to the Executive by ANMR shall vest and
be immediately exercisable for a period of twelve (12) months
from the date of termination or until the stock options
expiration date, whichever is earlier.
8. Miscellaneous.
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8.01 Assignment. This Agreement shall inure to
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the benefit of and be binding upon the parties hereto and
their respective heirs, successors, administrators,
successors and assigns.
8.02 Governing Law. This Agreement is made under
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and shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts.
8.03 Prior Agreements. This Agreement contains
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the entire agreement of the parties relating to the subject
matter hereof and supersedes all prior agreements and
understandings with respect to such subject matter,
including, and not limited to, the Severance Agreement
between the Executive and the Company dated as of February
16, 1995, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter
of this Agreement which are not set forth herein.
8.04 Arbitration. Any dispute arising under this
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Agreement shall be resolved by arbitration to be held before
one arbitrator under the auspices of the American Arbitration
Association to be heard in Boston, Massachusetts. In the
event the Executive is successful on any of his claims in the
arbitration proceeding, the Company shall reimburse him for
his costs directly related to the arbitration in an amount as
determined by the arbitrator. The determination of the
arbitrator shall be final and binding upon the parties
hereto.
8.05 Withholding Taxes. The Company may withhold
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from any benefits payable under this Agreement all federal,
state, city and other taxes as shall be required pursuant to
any law or governmental regulation or ruling.
8.06 Amendments. No amendment or modification of
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this Agreement shall be deemed effective unless made in
writing signed by the party against whom enforcement is
sought.
8.07 Notices. Any notice, request, demand or
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other document to be given hereunder shall be in writing, and
shall be delivered personally or sent by registered,
certified or express mail or facsimile followed by mail as
follows:
If to the Company:
Medical Diagnostics, Inc.
00 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attn: Chairman of the Board
Fax: (000) 000-0000
If to the Executive:
Xxxxx X. Xxxxxx
00 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
or to such other address as either party hereto may
hereinafter duly give to the other parties hereto.
8.08 Severability. To the extent any provision
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of this Agreement shall be invalid, illegal or unenforceable,
it shall be considered deleted here from and the remainder of
such provision and of this Agreement shall be unaffected and
shall continue in full force and effect. In furtherance and
not in limitation of the foregoing, should the duration of
geographical extent of, or business activities covered by any
provisions of this Agreement be in excess of that which is
valid or enforceable under applicable law, then such
provision shall be construed to cover only that duration,
extent or activities which may valid and enforceable be
covered. The Executive acknowledges the uncertainty of the
law in this respect and expressly stipulates that this
Agreement be given the construction which renders its
provisions valid and enforceable to the maximum extent (not
exceeding its express term) possible under applicable law.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year set forth above.
MEDICAL DIAGNOSTICS, INC.
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, Chairman
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
AGREED TO:
ADVANCED NMR SYSTEMS, INC.
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, Chairman
00 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
May 31, 1996
Xxxx Xxxxxx
Chairman of the Board
Advanced NMR Systems, Inc.
Medical Diagnostics, Inc. Subsidiary
00 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Dear Xxxx:
The purpose of this letter is to memorialize the agreement
Medical Diagnostics, Inc (MDI) and I have reached regarding
my employment agreement with MDI effective December 1, 1995.
MDI and I have agreed that the attached definition "Cause"
will replace the definition of "cause" as found in Section
7.04 of the Employment Agreement which we mutually executed
today. The attached definition will be edited only as to
conformance with the appropriate reference letters and
numbers with the exception of the word "felony" which shall
be replaced by the word "crime".
If the foregoing accurately reflects your understanding of
our agreement, please sign on the appropriate line below.
Sincerely,
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Agreed and Accepted:
Medical Diagnostics, Inc.
/s/ Xxxx Xxxxxx
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By: Xxxx Xxxxxx
(ii) Cause. Termination by the Company of your employment
for "Cause" shall mean termination upon (a) the willful and
continued failure by you to perform substantially your duties
with the Company (other than any such failure resulting from
your incapacity due to physical or mental illness) after a
written demand for substantial performance is delivered to
you by the President or the Board of Directors of the Company
which specifically identified the manner(s) in which the
President or the Board of Directors believes that you have
not substantially performed your duties , or (b) the willful
engaging by you in illegal conduct which is materially and
demonstrably injurious to the Company, or (c) conviction by
you by a court of competent jurisdiction of a felony. Any
act or failure to act based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or
omitted to be done, by you in good faith and in the best
interests of the Company. It is also expressly understood
that your attention to matters not directly related to the
business of the Company shall not provide a basis for
termination for Cause so long as the Board had approved your
engagement in such activities. Notwithstanding the foregoing,
you shall not be deemed to have been terminated for Cause to
pursuant to subsections 3(ii)(a) or (b), above, unless and
until there shall have been delivered to you a copy of a
resolution duly adopted by the affirmative vote and held for
such purpose (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board clauses (a) or (b) of this paragraph (ii) have been
breached and specifying the particulars thereof in detail.