EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made as of the 1st day
of May, 1997 by and between Imaging Dynamics, Inc., a New Jersey corporation
(the "Company"), and Xxxxxx Xxxxx, (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive, and the Executive
desires to accept such employment, on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto hereby agree as follows:
1. Employment Term. Subject to the terms and conditions hereof, the
Company hereby employs the Executive as a senior executive officer of the
Company, and the Executive agrees to serve the Company in such capacity, with
effect from May 1, 1997 through April 30, 2001, unless terminated earlier
pursuant to the terms hereof (the "Term").
2. Termination.
(a) This Agreement and the Executive's employment with the
Company may be terminated prior to the end of the Term (i) by the Executive at
any time upon 30 days' written notice to the Company, (ii) by the Company
without cause (as hereinafter defined) at any time upon 30 days' written notice
to the Executive (iii) by the Company for cause immediately upon written notice
by the Company to the Executive and (iv) by the Company immediately upon the
death or disability (as hereinafter defined) of the Executive.
(b) The term "cause" shall mean: (i) the Executive's willful
failure or refusal to perform specific reasonable directives of the Board of
Directors (the "Board") of the Company, which directives are consistent with the
scope and nature of the Executive's duties and responsibilities under this
Agreement, and which failure is not remedied by the Executive within seven (7)
days after being notified, in writing, of such failure by the Company; (ii) the
Executive's conviction of, or guilty plea to, a felony; (iii) any act of fraud
or dishonesty by the Executive involving the Company or the performance of his
duties hereunder, or the Executive's breach of any fiduciary duty to the
Company; (iv) the Executive has habitually abused alcohol or used illegal drugs;
or (v) the Executive's breach of any obligation under this Agreement, which
breach is not remedied by the Executive within ten (10) days after being
notified, in writing, of such breach by the Company. The term "disability" shall
mean that the Board of the Company determines in good faith on the basis of such
information as it deems appropriate in the circumstances that it appears that
the Executive is unable to perform his assigned duties due to illness, injury or
physical, mental or other incapacity, which is reasonably expected to continue
for a prolonged period as determined by the Board.
(c) If termination of this Agreement occurs pursuant to clause
(i), (iii) or (iv) of Paragraph 2(a), the Company shall pay to the Executive,
through the effective date of such termination, the accrued but unpaid amounts
payable to the Executive pursuant to Paragraphs 5 and 6(a) (appropriately
prorated to the date of such termination, if applicable); provided, however,
that the Company shall not be liable for any other amounts that would have been
payable to the Executive hereunder had his employment continued throughout the
Term, except, in the case of termination of this Agreement pursuant to clause
(iii) (other than in respect of Paragraph 2(b)(ii) or (iii) or (iv) of Paragraph
2(a), in addition to the other payments set forth above, the Company shall pay
to the Executive (x) in one lump sum within thirty (30) days following the
effective date of such termination an amount equal to $160,000 representing
twelve (12) months of salary pursuant to Paragraph 5(b) following the effective
date of such termination and (y) the amount, if any, due under Paragraph 5(b) in
respect of the Company's fiscal year in which the effective date of such
termination occurs payable in accordance with the provisions of Paragraph 5(b)
(for clarification purposes, it is understood and agreed that the amount, if
any, due to the Executive pursuant to this clause (y) shall not be prorated to
account for the termination of this Agreement during the relevant fiscal year of
the Company). If termination of this Agreement occurs pursuant to clause (ii) of
Paragraph 2(a), the Company shall pay to the Executive (i) the amount that the
Executive would have been owed, pursuant to Paragraph 5, had his employment
continued throughout the Term in equal quarterly installments (calculated by
dividing the aggregate amount so owed by the number of quarters then remaining
in the Term), provided that the amounts, if any, due under Paragraph 5(b) shall
be paid in accordance with the provisions thereof and (ii) all accrued but
unpaid amounts payable to the Executive pursuant to Paragraph 6(a) on the
effective date of such termination; provided, however, that the Company shall
not be liable for any other amounts that would have been payable to the
Executive hereunder had his employment continued throughout the Term. Each
payment of the amounts due under this paragraph (c) is subject in all respects
to the provisions of paragraph 7 hereof.
(d) With respect to the Executive, his successors, assigns,
heirs, executors, administrators and legal representatives, payment by the
Company of the amounts provided under Paragraph 2(c) shall represent liquidated
damages and shall release, relinquish and discharge the Company and its parents,
subsidiaries and affiliates and any director, officer, employee, principal,
shareholder or agent of the Company or its parents, subsidiaries or affiliates
from any and all claims, damages, losses, costs, expenses, liabilities and
obligations, whether known or unknown, which the Executive has or may have as a
result of the Executive's employment by the Company or the termination of such
employment. The release, relinquishment and discharge set forth in this
paragraph (d) shall not apply to any right, claim or interest arising out of or
under any document, instrument, agreement, arrangement or undertaking between
the Company and the Executive, other than this Agreement.
(e) The termination or expiration of this Agreement shall not
effect the continuing operation and effect of Paragraphs 2(d) and 4 hereof,
which shall continue in full force and effect.
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3. Duties. The Executive shall assist in the operation and conduct of
the business and related affairs of the Company as a senior executive officer,
with specific duties as designated by the Board of the Company. During the
period the Executive is employed by the Company, the Executive shall devote a
reasonable amount of his business time and efforts to the business and affairs
of the Company in order to satisfactorily perform his duties hereunder as
reasonably determined by the Board of the Company. The Executive shall report
directly to the Board of the Company.
4. Noncompetition; Nonsolicitation; Nondisclosure of Proprietary
Information; Surrender of Records; Inventions and Patents.
4.1 Noncompetition; Nonsolicitation. Upon any termination or
expiration of this Agreement, the Executive shall be subject to a two-year
restriction on, directly or indirectly, establishing, owning, managing,
operating, or engaging or otherwise participating in the conduct of, in North
America any business that is reasonably related to the Company's business or
operations; provided, however, that in no event shall the Executive be precluded
from establishing, owning, managing, operating, or engaging or otherwise
participating in the conduct of the Executive's dental practice. In addition,
upon any termination or expiration of this Agreement, the Executive shall be
subject to a two-year restriction on soliciting other employees to leave the
Company.
4.2 Proprietary Information. The Executive acknowledges that
during the course of his employment while discharging his duties he will of
necessity regularly have access to and make use of proprietary information and
confidential records (as each such term is defined below). The Executive
covenants that he shall not during the Term or at any time thereafter
(irrespective of the circumstances under which the Executive's employment by the
Company terminates), directly or indirectly, use for his own purpose or for the
benefit of any person or entity other than the Company, nor otherwise disclose,
any proprietary information to any individual or entity, unless such disclosure
has been authorized in writing by the Company or is otherwise required by law,
rule or regulation or applicable legal, regulatory or administration process or
by a court of competent jurisdiction. For purposes of this Agreement, the term
"proprietary information" shall include, but is not limited to: (a) the name
and/or address of any customer, vendor or affiliate of the Company or any
information concerning the transactions or relations of any customer, vendor or
affiliate of the Company with the Company or any of its shareholders,
principals, directors, officers or agents; (b) any information concerning any
product, service, technology, process, methodology or procedure employed by the
Company but not generally known to its customers, vendors or competitors or
under development by or being tested by the Company but not at the time offered
generally to customers or vendors; (c) any information relating to the Company's
computer software, computer systems, pricing or marketing methods, sales
margins, cost of goods, cost of material, capital structure, operating results,
borrowing arrangements or business plans; (d) any information which is generally
regarded as confidential or proprietary in any line of business engaged in by
the Company; (e) any business plans, budgets, advertising or marketing plans;
(f) any information contained in any of the Company's written or oral policies
and procedures
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or employee manuals; (g) any information belonging to customers, vendors or
affiliates of the Company or any other person or entity which the Company has
agreed to hold in confidence; (h) any inventions, innovations or improvements
owned, licensed or used by the Company or covered by Paragraph 4.4 below; and
(i) all written, graphic and other material relating to any of the foregoing.
Information that is not novel or copyrighted or patented may nonetheless be
proprietary information. The term "proprietary information" shall not include
information generally available to and known by the public or information that
is or becomes available to the Executive on a non-confidential basis from a
source other than the Company or the Company's directors, officers, employees,
shareholders, principals or agents (other than as a result of a breach of any
obligation of confidentiality).
4.3 Confidentiality and Surrender of Records. The Executive
shall not during the Term or at any time thereafter (irrespective of the
circumstances under which the Executive's employment by the Company terminates),
except as required by law, rule or regulation or applicable legal, regulatory or
administrative process or by a court of competent jurisdiction, directly or
indirectly, publish, make known or in any fashion disclose any confidential
records to, or permit any inspection or copying of confidential records by, any
individual or entity other than in the course of such individual's or entity's
employment or retention by the Company, nor shall he retain, and will deliver
promptly to the Company, any of the same following termination of his employment
hereunder. For purposes hereof, "confidential records" means all correspondence,
memoranda, files, manuals, books, lists, financial, operating or marketing
records, magnetic tape, or electronic or other media or equipment of any kind
which may be in the Executive's possession or under his control or accessible to
him which contain any proprietary information. All confidential records shall be
and remain the sole property of the Company during the Term and thereafter.
4.4 Inventions and Patents. All inventions, innovations, or
improvements in any of the Company's lines of business (including, without
limitation, technologies, policies, procedures, products, services, processes,
methodologies, developments, improvements, software, ideas, know-how and
discoveries, whether patentable or copyrightable or not) conceived or made by
the Executive, either alone or jointly with others, during the Term belong to
the Company. The Executive will promptly disclose in writing such inventions,
innovations or improvements to the Company and perform all actions reasonably
requested by the Company to establish and confirm such ownership by the Company,
including, but not limited to, cooperating with and assisting the Company in
obtaining patents for the Company in the United States and in foreign countries.
Any patent application filed by the Executive within a year after termination of
his employment hereunder shall be presumed to relate to any invention which was
made during the Term unless the Executive can provide evidence satisfactory to
the Company to the Company to the contrary.
4.5 Enforcement. The Executive acknowledges and agrees that,
by virtue of his position, his services and access to and use of confidential
records and proprietary information, any violation by him of any of the
undertakings contained in this Paragraph 4 would cause the Company immediate,
substantial and irreparable injury for which it has no
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adequate remedy at law. Accordingly, the Executive agrees and consents to the
entry of an injunction or other equitable relief by a court of competent
jurisdiction restraining any violation or threatened violation of any
undertaking containing in this Paragraph 4. The Executive waives posting by the
Company of any bond otherwise necessary to secure such injunction or other
equitable relief. Rights and remedies provided for in this Paragraph 4 are
cumulative and shall be in addition to rights and remedies otherwise available
to the parties hereunder or under any other agreement or applicable law.
5. Compensation. (a) Subject to the terms and conditions hereof, the
Company shall pay the Executive a salary at the rate of $13,333 per calendar
month throughout the Term. Subject to Paragraph 7 hereof, such compensation
shall be payable in accordance with the usual payroll practices of the Company
as of the first business day of each such calendar month, as compensation to the
Executive for the services rendered by the Executive hereunder.
(b) Subject to the terms and conditions hereof (including,
without limitation, Paragraph 7), in addition to the salary payable pursuant to
Paragraph 5(a), as compensation to the Executive for the services rendered by
the Executive hereunder, the Company shall pay to a bonus as determined by the
Company's board of directors, which bonus shall be equivalent to 70% of any
bonus granted to Xxxxxxx Xxxxxxx.
6. Benefits.
(a) Subject to the terms and conditions hereof, the Company
agrees to reimburse the Executive for all reasonable and necessary travel,
business entertainment and other business expenses incurred by the Executive in
connection with the performance of his duties under this Agreement. Subject to
Paragraph 7 hereof, such reimbursements shall be made by the Company on a timely
basis upon submission by the Executive of vouchers in accordance with the
Company's standard procedures. All such reimbursements shall be subject to such
reasonable limitations as may from time to time be prescribed by the Board of
the Company (in addition to the limitations set forth in the first sentence of
this Paragraph 6(a).
(b) Subject to the terms and conditions hereof, the Executive
shall be entitled to participate in any and all life insurance, medical
insurance, group health, disability insurance and other benefit plans as
determined by the Board of the Company. Additionally, subject to the terms and
conditions hereof, the Executive shall be entitled to receive annual paid
vacation and paid holidays made available pursuant to the Company's policy as
determined by the Board of the Company.
(c) The Company shall pay to Executive a monthly automobile
allowance equal to the Executive's monthly lease payments as well as the payment
of expenses, insurance and normal maintenance of such automobile. The Company
further covenants to reimburse Executive for any expenses associated with the
maintenance and upkeep of said automobile within seven (7) days of Executive
submitting receipts for such expenses.
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7. Payments. Notwithstanding any provision of this Agreement to the
contrary, the Company shall not be obligated to make any of the payments to the
Executive provided for hereunder until such time as the Board of the Company
determines that the Company has sufficient liquidity to make such payments (at
which time, such accrued but unpaid amounts shall be paid to the Executive),
provided that all such amounts payable hereunder to the Executive shall continue
to accrue to the Executive as provided herein, and provided further that no
accrued amount due to the Executive hereunder shall not be paid by reason of
this Paragraph 7 for more than one (1) year following the date such amount
accrued to the Executive hereunder.
8. Intentionally Omitted.
9. Notices. All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed to have been duly
given or made if (i) sent by registered or certified mail, return receipt
requested, or (ii) hand delivered, or (iii) sent by prepaid overnight carrier,
with a record of receipt, to the parties at the following addresses (or at such
other addresses as shall be specified by the parties by like notice):
(i) if to the Company:
00 Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
(ii) if to the Executive:
000 Xxxx Xxxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
10. Assignability; Binding Effect. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned or delegated by
either party hereto without the prior written consent of the other party.
Subject to the foregoing, this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors, permitted
assigns, heirs, executors, administrators and legal representatives, and the
terms "Company" and "Executive" shall be construed accordingly, and is not
intended to confer upon any other person or entity any rights or remedies
hereunder.
11. Complete Understanding; Amendment; Waiver. This Agreement
constitutes the complete understanding between the parties with respect to the
employment of the Executive and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof, and no statement, representation, warranty or covenant
has been made by either party with respect thereto except as expressly set forth
herein. This Agreement shall not be altered, modified, amended or terminated
except by a written instrument signed by each of the parties hereto. Any waiver
of any term or provision hereof, or of the application of any such term or
provision to any circumstances, shall be in writing
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signed by the party charged with giving such waiver. Waiver by either party
hereto of any breach hereunder by the other party shall not operate as a waiver
of any other breach, whether similar to or different from the breach waived. No
delay on the party of the Company or the Executive in the exercise of any of
their respective rights or remedies shall operate as a waiver thereof, and no
single or partial exercise by the Company or the Executive of any such right or
remedy shall preclude other or further exercise thereof.
12. Severability. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid or unenforceable to any extent,
the remainder of this Agreement, or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid or unenforceable, shall not be affected thereby, and each provision
hereof shall be enforced to the fullest extent permitted by law. If any
provision of this Agreement, or any part thereof, is held to be invalid or
unenforceable because of the scope or duration of or the area covered by such
provision, the parties hereto agree that the court making such determination
shall reduce the scope, duration and/or area of such provision (and shall
substitute appropriate provisions for any such invalid or unenforceable
provisions) in order to make such provision enforceable to the fullest extent
permitted by law and/or shall delete specific words and phrases, and such
modified provision shall then be enforceable and shall be enforced. The parties
hereto recognize that if, in any judicial proceeding, a court shall refuse to
enforce any of the separate covenants contained in this Agreement, then that
invalid or unenforceable covenant contained in this Agreement shall be deemed
eliminated from these provisions to the extent necessary to permit the remaining
separate covenants to be enforced. In the event that any court determines that
the time period or the area, or both, are unreasonable and that any of the
covenants is to that extent invalid or unenforceable, the parties hereto agree
that such covenants will remain in full force and effect, first, for the
greatest time period, and second, in the greatest geographical area that would
not render them enforceable. To the extent that a court of competent
jurisdiction determines that the Executive breached any undertaking in Paragraph
4, the Company's obligations to make payments pursuant to Paragraphs 2(c), 5 and
6 shall immediately cease.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to the
principles of conflict of laws.
14. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall constitute
one agreement binding on the parties hereto.
15. Enforcement Costs. With respect to any suit, action or proceeding
arising out of or in connection with this Agreement or the Executive's
employment with the Company hereunder, the Company shall be solely responsible
for all fees, costs and expenses (including, without limitation, the fees and
costs of attorneys and court costs) incurred by the Company and/or the
Executive, except, if it is determined by a court in a final and non-appealable
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judgment that the Executive engaged in the activity described in Paragraph
2(b)(ii) or (iii) hereof, then the Executive shall be solely responsible for all
such fees, costs and expenses incurred by the Executive.
16. Titles and Captions. All paragraph titles or captions in this
Agreement are for convenience only and in no way defined, limit, extend or
describe the scope or intent of any provision hereof.
IN WITNESS WHEREOF, each of the parties hereof has duly executed this
Agreement as of the date first above written.
IMAGING DYNAMICS, INC.
By:
Name:
Title:
XXXXXX XXXXX
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