Exhibit 10.14
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[LOGO OF x-XxxXxxx.xxx]
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August 13, 2001
Xxxx Xxxxxxxx
000 X, Xxxxxx Xxxx
Xxxxx Xxxxx Xxxxx. XX 00000
Dear Xxxx:
This letter is to confirm our discussion and agreement relative to your
termination from x-XxxXxxx.xxx (the "Company"), your claims against the
Company, and claims the company has against you. This letter, upon your
execution, supersedes Article 5 of your Executive Employment Agreement
(attached) with the Company and constitutes a fina1 binding settlement
between you and the Company with regard to all pending disputes, claims, causes
of action, and disputes, including, but not limited to, claims for breach of
contract, age discrimination, and violations of labor and/or employment laws. By
executing this, Agreement, you and the Company are mutually releasing all
claims, known and unknown, that might be asserted between and among you and the
Company, including, any claims by, or against, any agents, officers, directors,
stockholders, employees, attorneys, or warrant holders.
1. Your last day of employment with the Company was July 20, 2001.
2. You will be paid in regular semi-monthly payroll cycles for 124.97
hours of unused vacation ("vacation period") which equates to
$13,518.39. A check for 56 hours of vacation will be issued
immediately.
3. You will be paid a severance of $9,375.00 in six (6) regular
semi-monthly payroll cycles ("severance period") (totaling
$56,250.00). These severance payments will start with the pay
period ending August 31, 2001.
4. The Company will pay your COBRA benefits through December 31, 2001.
5. You will receive fully vested options on 160,000 shares of
x-XxxXxxx.xxx stock at $.01 through the Company's 2000
Non-Qualified Stock Option and Stock Bonus Plan. Those will be
registered and unrestricted shares. The shares will be delivered to
you or your broker within five (5) business days of the execution
of this agreement. On any given trading day, you may not trade more
than 10,000 shares per day. For purposes of this provision, a trade
shall constitute any sale, transfer, option, warrant, assignment,
hedge, pledge, or loan concerning or relating to the subject
shares. This limitation is not cumulative, that is, no matter what,
on any given trading day you may not conduct a transaction in
excess of 10,000 shares. Any such transaction in violation of this
agreement shall cause the termination of all of your shares. Your
broker must confirm that he/she will abide by these trading
restrictions.
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6. You will immediately dismiss and withdraw any complaint or claim
you have made against the Company in any Court, Arbitration, or
with any governmental body, and you shall dismiss and withdraw any
complaint against any person associated with the Company, including
any officer, director, shareholder, employee, attorney, or agent.
You shall not file any such complaint.
7. The Company and any person associated with the Company, including
any officer, director, employee, attorney, or agent shall
immediately dismiss and withdraw any complaint, investigation or
claim they have made against you in any Court, Arbitration, or with
any governmental body. The company shall not file any such
complaint.
8. You shall maintain the confidentiality of the Company's trade
secrets and financial data.
9. You will make yourself available to assist the Company in its
litigation with VidiMedix. Such assistance will include, but not be
limited to, meeting with Company counsel to discuss the facts of
the case, executing truthful declarations (when necessary)
regarding the facts of the case, offering truthful deposition or
trial testimony regarding the facts of the case. You further agree
that you will not discuss the facts of the case, or any matter
relating to that case with any party (or any representative of any
party, including any attorney, agent, or investigator) without the
prior written consent of the Company unless otherwise order by a
court of law.
After conferring with your advisor or legal counsel, please confirm that you are
in agreement with these terms.
Sincerely,
/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Chairman and CEO
Agreed to and accepted by:
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
Attach.
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made by and
between x-XxxXxxx.xxx, a Nevada corporation (the "Company"), and Xxxx
Xxxxxxxx ("Executive") as of the date of execution below and in view of the
following:
A. The Company is a corporation engaged in the business of
providing computer software and services solutions to companies engaged in the
business of providing health care services.
B. Executive has expertise in the fields and potential fields in
which the Company is engaged.
C. The Company recognizes Executive's skills, judgment and ability
and the Company believes Executive's experience, knowledge and abilities will be
extremely valuable to the Company.
ACCORDINGLY, the parties now agree as follows:
Article 1
TERM OF AGREEMENT
1.1 INITIAL TERM. The initial term of this Agreement (the "Term")
shall begin on the date of execution and shall continue until the earlier of (a)
the date on which it is terminated pursuant to Article 5 or (b) August 28, 2003.
1.2 RENEWAL TERMS. Unless either party gives written notice to the
other party of its election to terminate this Agreement at least sixty (60)
days prior to the end of the then-current term, without further action by
either party, this Agreement shall be renewed on August 28, 2003 and in each
succeeding year for an additional term of one year until terminated pursuant
to Article 5 (the "Additional Term").
Article 2
EMPLOYMENT
2.1 EMPLOYMENT OF EXECUTIVE. The Company hereby hires Executive as
its Chief Operating Officer. Executive hereby accepts such employment on the
terms and conditions of this Agreement.
2.2 DUTIES. Executive's duty shall be to manage the operations of
the service portion of the Company's business by reporting to and following the
direction of the Company's President and CEO or his designee. Notwithstanding
the foregoing, Executive shall have at a minimum the duties and responsibilities
commonly incident to the position of a Chief Operating Officer. The Company
may reasonably request travel in connection with the business of the Company
from time to time.
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2.3 STANDARD OF PERFORMANCE. Executive agrees that he will at all
times faithfully and industriously and to the best of his ability, experience
and talents perform all of the duties that may be required of and from him
pursuant to the terms of this Agreement. Executive acknowledges and understands
that the Company's business is very private and confidential. Executive
acknowledges and understands that the Company sincerely desires its activities
to be conducted ethically, morally, legally and in an honorable and respectful
manner. Executive agrees to be faithful to these purposes in carrying out his
duties hereunder.
2.4 EXCLUSIVE SERVICE. During the term of this Agreement:
(a) Executive shall devote all of his business time,
energies and abilities to the performance of his duties under this Agreement
(reasonable absences for illness and during holidays and vacations excepted).
(b) Executive shall not, without prior notice to the
Company, render to others any substantial service of any kind that would
materially interfere with Executive's fulfillment of his duties hereunder.
(c) Executive shall not, without prior notice to the
Company, maintain any affiliation with, whether as an agent, consultant,
Executive, officer, director, trustee or otherwise, nor shall he directly or
indirectly render any services of any advisory nature or otherwise to, or
participate or engage in, any other business or investment activity; provided,
however, that Executive may continue to maintain any such directorships with
companies that are not technology companies competitive with the business of
Company. Notwithstanding the foregoing, Executive may engage in charitable or
other business activities that do not directly or indirectly compete with the
business of the Company.
Article 3
COMPENSATION
3.1 SALARY. During the term of this Agreement, the Company shall
pay to Executive an annual salary of not less than Two Hundred and Twenty Five
Thousand Dollars ($225,000) in equal installments payable no less frequently
than semi-monthly (the "Base Salary"). Executive shall be eligible to receive
annual cost of living adjustments in conjunction with Employer's standard
practices and procedures.
3.2 BONUS. Executive shall be eligible to receive in addition to
his Base Salary, annual incentive compensation up to 60% of his then current
Base Salary. Said annual incentive compensation will be based on business and
personal performance objectives as shall be determined by the President and CEO
of the Company.
3.3 FRINGE BENEFITS. Subject to Section 3.5 and upon satisfaction
of the applicable eligibility requirements, Executive shall be entitled to all
fringe benefits, which Company may make available from time to time for its
executives. Such benefits shall include, without limitation, those available, if
any, under any group insurance, pension or retirement plans or sick leave policy
that may be developed by Company in the future.
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3.4 VACATION. For calendar year 2000, Executive shall be entitled
to four (4) weeks of vacation. Thereafter, during each subsequent calendar year
of the Term and any Additional Term, Executive shall he entitled annually to
four (4) weeks of vacation.
3.5 DEDUCTIONS FROM COMPENSATION. The Company shall deduct and
withhold from all compensation payable to Executive all amounts required to be
withheld for social security, federal, state and other taxes and deductions as
authorized by Executive or required by law.
3.6 STOCK OPTIONS. Concurrent with the execution of this
Agreement, Executive will be granted options to purchase 150,000 shares
of x-XxxXxxx.xxx common stock at an exercise price equal to the closing price of
x-XxxXxxx.xxx common stock as reported by The American Stock Exchange on such
date. Eighty Thousand (80,000) of the Options will be granted under an
accelerated vesting schedule as follows: (a) One Third (33.33%) will vest and
become exercisable at the end of Sixty Days (60) from the date of the execution
of this Agreement; (b) another One Third (33.33%) will vest and become
exercisable at the end of Ninety Days (90) from the date of the execution of
this Agreement; and (c) the remaining One Third (33.33%) will vest and become
exercisable at the end of One Hundred Twenty Days (120) from the date of
the execution of this Agreement. The remaining Seventy Thousand (70,000) Options
granted shall be subject to the terms of the x-XxxXxxx.xxx Stock Option Plan.
Among other things, the Plan provides that options granted under the Plan will
become vested over a four year period, and exercisable as to portions of the
Shares as follows: (a) on the First Vesting Date the Option will become vested
and exercisable to one quarter (25%) of the Shares; and (b) at the end of the
second year the Option will become vested and exercisable as to 50% of the
Shares and (c) at the end of the third year the Option will become vested and
exercisable as to 75% of the Shares; and the remaining shares will become vested
following the fourth year.
Executive will also be eligible to quarterly stock option grants which
will be determined by the establishment of milestones which are critical to the
success of the company. These milestones will fall into the categories of
revenue recognition, margin, product delivery and customer service. The
milestones will be established consistent with formal company objectives. The
stock option milestones will be agreed to by the CEO and the executive prior to
the commencement of the period in which executive is eligible. The annual pool
will be 100,000 stock options, with the maximum award each quarter being 25,000
stock options based on performance against the objectives. The stock options
granted will be subject to the terms of the x-XxxXxxx.xxx Stock Option Plan.
Article 4
REIMBURSEMENT OF EXPENSES
4.1 TRAVEL AND OTHER EXPENSES. Upon presentment of verifiable
invoices and other reasonable documentation as may be requested by the Company,
Executive shall be reimbursed for the reasonable costs and expenses that he
incurs in connection with the performance of his duties and obligations under
this Agreement.
Article 5
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TERMINATION
5.1 TERMINATION DATE. The date on which this Agreement terminates
shall be the "Termination Date." After the Termination Date, Executive shall
cease to be employed by Company provided, however, that Executive shall be
paid any and all compensation due from the Company for the entire Term or any
Additional Term to the extent the provisions below so provide.
5.2 TERMINATION BY THE COMPANY. Subject to the provisions of this
Section 5, the Company may terminate this Agreement at any time for any reason,
either with or without "cause" (as that term is defined in Section 5.3 below. If
the Company terminates Executive other than for "cause" or if the Company
willfully breaches a material provision of this Agreement and fails to cure such
breach within thirty (30) days of written notice from Executive, in addition to
payment of Executive's Base Salary, accrued vacation and reimbursable expenses
through the Termination Date, Executive shall be entitled to the following:
(a) SEVERANCE PAY. The Company shall pay Executive upon such
termination a lump-sum amount equal to the greater of (1) the sum of twelve (12)
months' of Executive's then current Base Salary, or (2) the sum of the monthly
portion of the current salary times the number of months (including partial
months) remaining until the Termination Date (the "Severance Pay"). Executive's
entitlement to the Severance Pay shall not be subject to a duty to mitigate,
nor shall the Company be entitled to any credit or right of set-off with respect
to any compensation earned by Executive subsequent to the Termination Date.
5.3 TERMINATION BY THE COMPANY FOR "CAUSE" For purposes, of this
Agreement, termination for "cause" shall include termination of Executive
by the Company for the following as determined by a majority vote of Company's
Board; (a) a willful breach by Executive of any material provision of this
Agreement that causes substantial damage to the Company and remains uncured by
Executive within thirty (30) days of written notice of such breach from the
Company, (b) a willful failure or refusal to perform Executive's duties
hereunder that causes substantial damage to the Company and remains uncured by
Executive within thirty (30) days of written notice of such breach from the
Company, of (c) if Executive is convicted of a felony. In the event Executive is
terminated for cause pursuant to this Section 5.3 prior to the conclusion of the
Term of this Agreement, there shall be no further compensation of any kind and
no fringe benefits of any kind payable to Executive subsequent to the
Termination Date. In the event Executive is terminated pursuant to this Section
5.3 during any Additional Term, Executive shall receive all compensation and
other benefits he would have otherwise received pursuant to Section 3 above
during the remainder of the Additional Term.
5.4 TERMINATION BY EXECUTIVE: Any termination by Executive of this
Agreement during the Term shall be deemed to be in violation of this Agreement.
5.5 OTHER TERMINATION EVENTS. This Agreement shall terminate at
Executive's death.
5.6 RETURN OF COMPANY PROPERTY AND PROCEEDS. Within five
(5) days after the Termination Date, Executive shall return to Company all
products, books, records, forms,
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specifications, formulae, data processes, designs, papers, computer source
codes, computer object codes, computer information, computer manuals, computer
hardware, computer software and writings relating to the business of Company
including without limitation proprietary or licensed computer programs, customer
lists, billing and collection data, and customer data, and/or copies or
duplicates thereof in Executive's possession or under Executive's control.
Executive shall not retain any copies or duplicates of such property and all
licenses granted to him by Company to use computer programs or software shall
be revoked on the Termination Date.
Article 6
DISABILITY
6.1 "DISABILITY PERIOD". For purposes of this Agreement,
"Disability Period" means a continuous period of time of at least 180 days
during which Executive suffers any physica1 or mental impairment that causes
Executive to be unable to substantially perform the essential functions of
Executive's position despite reasonable accommodation by the Company.
6.2 DISABILITY PERIOD AND COMPENSATION. During any Disability
Period, Executive shall be compensated as if he were fully employed hereunder.
In all other circumstances, Executive shall not be compensated at all during any
Disability Period.
6.3 TERMINATION FOR DISABILITY OR ABSENCE. Notwithstanding any
provision of this Agreement to the contrary, if Executive has been absent from
his employment, for any reason, for a continuous period of more than 180
days, the Company may treat such activity as a termination by Executive and the
Company may terminate this Agreement at that time by giving notice to
Executive specifying the Termination Date. In such a circumstance, the Company
shall not be obligated in any way, shape or form to compensate Executive
further.
Article 7
NON-COMPETITION
During the term of this Agreement, Executive shall not, without the
prior written consent of Company's Board of Directors, directly or indirectly
render services of a business, professional, or commercial nature to any person
or firm, whether for compensation or otherwise, or engage in any activity
directly or indirectly competitive with or adverse to the business or welfare of
Company, whether alone, as a partner, or as an officer, director, Executive,
consultant or stockholder (other than as a passive investor of no more
than 5% in a publicly traded company, whether or not it competes with the
Company).
Article 8
CONFIDENTIAL INFORMATION
8.1 TRADE SECRETS OF THE COMPANY. Executive understands that,
during the term of this Agreement, he will develop, have access to and become
acquainted with significant and valuable proprietary trade secrets which are
owned by the Company and/or its affiliates and which are regularly used in the
operation of the businesses of such entities. Executive shall not disclose such
trade secrets, directly or indirectly, or use them in any way, either during
the term of this Agreement or at any time thereafter, except as required in the
course of his employment by the Company. All
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files, contracts, manuals, reports, letters, forms, documents, notes,
notebooks, lists, records, documents, customer lists, vendor lists, purchase
information, designs, computer programs, computer source codes, computer
object codes and similar items and information relating to the businesses of
such entities, whether prepared by Executive or otherwise and whether now
existing or prepared at a future time, coming into his possession shall remain
the exclusive property of the Company, and shall not be removed for purposes
other than work-related from the premises where the work of Company is
conducted, except with the prior written authorization by the Board of Directors
of the Company.
8.2 CONFIDENTIAL DATA OF THE CUSTOMER OF THE COMPANY. Executive, in
the course of his duties, will have access to and become acquainted with
financial, accounting, statistical, and personal data of customers of the
Company and of their affiliates and/or of other persons the Company does
business with from time to time. All such data is confidential and shall not be
disclosed, directly or indirectly, or used by Executive in any way, either
during the term of this Agreement (except as required in the course of his
employment by the Company) or at any time thereafter. Executive shall comply
with all laws and regulations appertaining to the sanctity of others' property,
both intellectual and otherwise.
8.3 CONFIDENTIALITY PROGRAM. As an executive of the Company,
Executive shall take such steps and shall adopt and/or implement such policies
and programs as may be necessary to protect and to cause all trade secrets and
other confidential information of the Company to be protected including placing
all computer source and object codes into a secure environment. Executive shall
take such steps and shall adopt and/or implement such policies and programs
as may be necessary to cause all subordinate executives of the Company to
protect the trade secrets and other confidential information of the Company, its
affiliates and customers.
8.4 CONTINUING EFFECT. The provisions of this Article 8 shall
survive the termination of this Agreement.
Article 9
OTHER PROVISIONS
9.1 COMPLIANCE WITH OTHER AGREEMENTS. Executive represents and
warrants to the Company that the execution, delivery and performance of this
Agreement will not conflict with or result in the violation or breach of any
term of provision of any order, judgment, injunction, contract, agreement,
commitment or other arrangement to which Executive is a party or by which he is
bound, including without limitation any agreement restricting the sale of
products similar to Company's products in any geographic location or otherwise.
Executive intends that Company shall rely on his representation and warranty and
that such representation and warranty shall survive this date.
9.2 DIRECTORS AND OFFICERS INDEMNITY AGREEMENT. The Company shall
provide Executive with a Directors and Officers Indemnity Agreement to be
mutually agreed between Executive and the Board.
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9.3 ARBITRATION. Any dispute arising out of or relating to this
Agreement shall be submitted to arbitration in Los Angeles County, California,
before a sole arbitrator (the "Arbitrator") selected from the American
Arbitration Association ("AAA"), and shall be conducted in accordance with the
AAA's Employment Dispute Resolution Rules (including the Expedited Labor
Arbitration Procedures) and the provisions of California Code of Civil Procedure
Section 1280 ET SEQ. as the exclusive remedy of such dispute; PROVIDED HOWEVER,
that provisional injunctive relief may, but need not, be sought in a court of
law while arbitration proceedings are pending, and any provisional injunctive
relief granted by such court shall remain effective until the matter is finally
determined by the Arbitrator. Final resolution of any dispute through
arbitration may include any remedy or relief that the Arbitrator deems just and
equitable, including permanent injunctive relief or specific performance or
both, and the Arbitrator is hereby empowered to award such relief. Any award or
relief granted by the Arbitrator hereunder shall be final and binding on the
parties hereto and may be enforced by any court of competent jurisdiction.
9.4 ATTORNEYS' FEES. If either party brings legal action or suit to
enforce the provisions of this Agreement or to secure damages for breach, the
prevailing party shall be entitled to reasonable attorneys' fees actually
incurred.
9.5 NON-DELEGABLE DUTIES. This is a contract for Executive's
personal services. The duties of Executive under this Agreement are personal and
may not be delegated or transferred in any manner whatsoever. Executive's
rights under this Agreement are personal and such rights shall not be subject to
involuntary alienation, assignment or transfer during Executive's life.
9.6 ENTIRE AGREEMENT. This Agreement is the only Agreement between
the parties with respect to the subject matter of this Agreement, and any claims
that there have been other agreements, summaries of agreements, understandings,
representations or warranties between the parties with respect to such subject
matter shall be rejected in that the parties hereby deem such prior agreements
as having been superseded and terminated by this Agreement. The parties agree
that there have been absolutely no prior oral agreements, understandings or
warranties discussed between the parties that conflict in any manner with this
Agreement.
9.7 GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of California and any dispute
hereunder which is permitted under Section 9.3 above to be litigated shall be
litigated in the state and federal courts situated in Los Angeles, California.
9.8 SEVERABLE PROVISIONS. The provisions of this Agreement are
severable, and if any one or more provisions may be determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions, and any
partially unenforceable provisions to the extent enforceable, shall nevertheless
be binding and enforceable.
9.9 EFFECT OF WAIVER. The waiver by either party of any breach of
any term, promise or condition of this Agreement shall not constitute a waiver
of any subsequent breach of the same or any other term, promise or condition.
The failure by either party to enforce any right for a period of time shall not
constitute a waiver of such right or of any term, promise or condition of this
Agreement.
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9.10 BINDING EFFECT. Subject to Section 9.5, this Agreement shall
inure to the benefit of, shall be enforceable by and shall be binding upon
Company, its successors and assigns.
9.11 REFERENCE TO ARTICLES AND SECTIONS. All references no Articles,
Sections and subsections refer to Articles, Sections and subsections of Sections
of this Agreement, unless the context expressly indicates otherwise.
9.12 CAPTIONS. Captions of Articles and Sections of this Agreement
are solely for the convenience of the parties and shall not limit, describe, or
affect the substance or scope of any provision of this Agreement.
IN WITNESS WHEREOF, the party hereto have duly executed this Employment
Agreement as of the 30 day of August, 2000.
x-XxxXxxx.xxx
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Chief Executive Officer
EXECUTIVE
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
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