Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement") shall be
effective, as of July 15, 2002, by and between OrthoLogic Corp., a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxxxxx ("Employee").
RECITALS:
A. Employee has been employed by the Company in the position of
President/CEO, pursuant to an Employment Agreement that was effective as of
October 20, 1997 (the "1997 Employment Agreement").
B. The parties now wish to amend the 1997 Employment Agreement by replacing
it with this Agreement for all purposes.
AGREEMENTS:
The parties hereby agree as follows:
1. REPLACEMENT OF 1997 EMPLOYMENT AGREEMENT. Effective immediately, the
1997 Employment Agreement shall be replaced by this Agreement for all purposes.
The consideration for such amendment and replacement is solely as stated in this
Agreement and neither party shall have any further rights or duties under the
1997 Employment Agreement.
2. DEFINITIONS. Capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings assigned to them in Exhibit A.
3. EMPLOYMENT AND DUTIES.
(a) DEFINITION OF "ELECTION." Within the limitations described in
Sections 9 and 10 of this Agreement, either party may give the other notice that
he or it has elected to begin a two-year transition leading to the termination
of Employee's employment by the Company. Such a notice is referred to in this
Agreement as an "Election."
(b) DUTIES BEFORE AN ELECTION. Subject to the terms and conditions of
this Agreement, prior to an Election, the Company employs Employee to serve in a
managerial capacity and as a member of its Board of Directors (the "Board") and
Employee accepts such employment and agrees to perform such reasonable
responsibilities and duties as may be assigned to him from time to time by the
Board. Employee's title shall be President/CEO of the Company, with general
responsibility for Company operations. Employee will report to the Board. Prior
to an Election, the Company shall use its best efforts to maintain Employee as a
member of the Board.
(c) DUTIES AFTER AN ELECTION. Effective immediately upon an Election,
Employee will report to the Company's President and CEO or to the Board as
determined by the Board. Employee shall not have an official title or any set
work hours. While various projects assigned to Employee may require more or less
time within any given month, it is contemplated that, without his consent,
Employee will not be asked to work on Company matters for more than 7.5 days per
quarter. Effective upon an Election, Employee hereby resigns from the Board and
as an officer of the Company. Employee understands that from and after the
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Election, and until the end of the term of this Agreement, the Company will not
provide him with an office, but will provide reasonable secretarial and other
staff support and will provide ancillary office equipment such as a fax machine,
dictating equipment and a desk-top computer that Employee may continue to use
until the end of the term at another location selected by him. After an
Election, Employee shall not be entitled to use any Company owned or supported
laptop computers or cell phones except to the extent required by specific
projects assigned to Employee.
4. TERM. Before an Election, Employee's employment shall have an indefinite
term and shall continue until terminated as provided in this Agreement. Upon an
Election, the term of Employee's employment by the Company shall convert
automatically to a two-year term beginning on the date of such Election. After
the Election, any extension or renewal of such term shall require the written
consent of both parties.
5. COMPENSATION.
(a) SALARY. (i) Before an Election, the Company shall pay Employee a
minimum base annual salary, before deducting all applicable withholdings, of
$330,000 per year, payable at the times and in the manner dictated by the
Company's standard payroll policies. The minimum base annual salary shall be
reviewed annually, at the end of the Company's fiscal year, by the Compensation
Committee of the Board and may be increased, but shall not be decreased; (ii)
during the first 12-month period immediately following an Election, Employee's
base annual salary shall remain at the same level as it was at the time the
Election was made; (iii) during the second 12 months after an Election,
Employee's base annual salary shall be $330,000 regardless of the level of base
annual salary being paid to Employee prior to the Election.
(b) BONUSES. (i) Before an Election, Employee shall be eligible to
participate in an incentive bonus program as developed and adopted, and as
revised from time to time, by the Board. Such program shall be based upon the
achievement of individual goals by Employee and upon Company performance. The
program shall provide for a target bonus of 50% of Employee's base salary for
achievement of a Board-approved plan. (ii) Additionally, Employee shall be
entitled to receive a special bonus upon the first to occur of a Change in
Control or a Sale of the ***. Either such special bonus shall be calculated as
provided in Exhibit B. (iii) Employee shall not be entitled to accrue any
additional bonus amounts after an Election occurs, but any bonuses fully earned
prior to the Election shall remain due in accordance with their terms, and any
bonuses accruing prior to an Election pursuant to an incentive bonus program
shall be paid on a pro rata basis depending on the percentage of the bonus
measurement period that has elapsed at the time of the Election.
(c) STOCK OPTIONS. From time to time, as determined by the Board in
its discretion, the Company shall grant to Employee options to purchase shares
of the Company's common stock, with an exercise price equal to the fair market
value of the stock on the effective date of the grant.
6. FRINGE BENEFITS. Both before and after an Election, Employee shall be
entitled to participate in all employee benefit plans (including without
limitation pension, savings, medical, dental and disability plans) generally
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available to employees. The manner of implementation of such benefits with
respect to such items as procedures and amounts are discretionary with the
Company but shall be commensurate with Employee's executive capacity. The
Company agrees to maintain term life insurance during the term of Employee's
employment under this Agreement in an amount equal to two times Employee's base
salary, as it may be adjusted from time to time, with the beneficiary to be
designated by Employee. Until an Election occurs, the Company will also provide
Employee with an automobile expense allowance of $450 per month.
7. EXPENSES. In addition to the compensation and benefits provided above,
the Company shall, upon receipt of appropriate documentation, reimburse Employee
each month for his reasonable travel, lodging, entertainment, promotion and
other ordinary and necessary business expenses consistent with Company policies.
8. TERMINATION.
(a) FOR CAUSE. The Company may terminate Employee's employment for
Cause upon written notice to Employee stating the facts constituting such Cause,
provided that Employee shall have 30 days following such notice to cure any
conduct or act, if curable, alleged to provide grounds for termination for Cause
hereunder. In the event of termination for Cause, the Company shall be obligated
to pay Employee only the minimum base salary due him through the date of
termination. The written notice shall state the Cause for termination. "Cause"
shall include gross or willful neglect of duty, willful failure to abide by
instructions or policies from or set by the Board of Directors, or conviction of
a felony or misdemeanor punishable by at least one year in prison, or pleading
guilty or NOLO CONTENDERE to same; provided that the fact that the Company does
not request services from Employee with respect to any period or periods of time
after an Election shall not constitute Cause.
(b) WITHOUT CAUSE. The Company may not terminate Employee's employment
at any time without Cause.
(c) DISABILITY. Prior to an Election, but not afterward, if Employee
fails to perform his duties hereunder on account of illness or other incapacity
for a period of 60 consecutive days, or for 90 days during any six-month period,
the Company shall have the right to terminate this Agreement without further
obligation hereunder except as otherwise provided in disability plans generally
applicable to executive employees.
(d) DEATH. Prior to an Election, if Employee dies, this Agreement
shall terminate immediately, and Employee's legal representatives shall be
entitled to receive the base salary due Employee through the last day of the
calendar month in which his death shall have occurred and any other death
benefits generally applicable to executive employees. If Employee dies after an
Election, Employee's legal representatives shall be entitled to receive only the
proceeds of any appropriate life insurance policies and the base salary due
Employee through the end of the term at a time and in a manner similar to when
it would have been paid to Employee if he had survived, except for any change in
withholding justified by the change in circumstances.
(e) RESIGNATION. Employee may resign his employment by giving notice
to the Company, which shall also include his resignations as an officer and as a
director of the Company. In the event of such a resignation, the Company shall
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be obligated to pay Employee only the minimum base salary due him through the
effective date of the resignation (any vested options will remain vested, and
will expire as provided in the Company's Stock Option Plan and Employee's Letter
of Grant).
9. ELECTIONS BY THE COMPANY. The Company may make an Election at any time
with or without Cause.
10. ELECTIONS BY EMPLOYEE.
(a) AFTER A CHANGE IN CONTROL OR SALE. Employee may make an Election
at any time after the closing of either a Change in Control or a Sale of the
***, with or without Good Reason.
(b) BEFORE A CHANGE IN CONTROL OR SALE. Employee shall be entitled to
make an Election before the closing of a Change in Control or a Sale of the ***
only if "Good Reason" exists. Good Reason shall exist if the Company has done
any of the following:
(1) failed to maintain Employee's base salary at the level
required by Section 5(a);
(2) failed to provide for Employee's participation in the
Company's or an Affiliate's annual bonus plan; stock option
plan or other equity incentive programs; or group medical,
dental, life, disability, retirement, profit sharing,
thrift, nonqualified and deferred compensation plans, in
each case on a basis comparable to that enjoyed by other
executive employees of the Company or any of its Affiliates;
(3) failed to provide vacation and perquisites substantially
equivalent to those provided by the Company or any of its
Affiliates to executive employees;
(4) changed Employee's duties and responsibilities so that they
are not at least commensurate with those described in
Section 3(b);
(5) changed Employee's primary place of employment by more than
25 miles from Employee's current office location or more
than 10 additional miles from Employee's primary residence;
or
(6) terminated or attempted to terminate this Agreement for
Cause if it is thereafter determined that Cause did not
exist under this Agreement with respect to such termination.
11. LIMITATIONS ON TRANSITIONAL COMPENSATION AND BENEFITS.
(a) GENERAL RULES. The Code places significant tax consequences on
Executive and Company if the total payments made to Executive due, or deemed
due, to a Change in Control exceed prescribed limits. For example, if
Executive's "Base Period Income" (as defined below) is $100,000 and Executive's
"Total Payments" exceed 299% of such Base Period Income (the "Cap"), Executive
will be subject to an excise tax under Section 4999 of the Code of 20% of all
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amounts paid to him in excess of $100,000. In other words, if Executive's Cap is
$299,999, he will not be subject to an excise tax if he receives exactly
$299,999. If Executive receives $300,000, he will be subject to an excise tax of
$40,000 (20% of $200,000). If an excise tax is imposed on Executive as a result
of the application of Sections 280G and 4999 of the Code, for any reason, due to
this Agreement or otherwise, Company shall pay to Executive a "gross-up
allowance" equal in amount to the sum of (i) the excise tax liability of
Executive on the Total Payments, and (ii) all the total excise, income, and
payroll tax liability of Executive on the "gross-up allowance," further
increased by all additional excise, income, and payroll tax liability thereon,
which increase shall be part of the "gross-up allowance" for purpose of
computing the "gross-up allowance." Company shall indemnify and hold Executive
harmless from such additional tax liability for the income and payroll tax
arising from the "gross-up allowance" and all excise tax arising with respect to
compensation and other payments made to Executive under this Agreement and
excise, income, and payroll tax on the "gross-up allowance," and all penalties
and interest thereon. The purpose and effect of the gross-up allowance is to
cause Executive to have the same net compensation after income, excise, and
payroll taxes that Executive would have if there was no tax under Code ss. 4999.
(b) SPECIAL DEFINITIONS. For purposes of this Section, the following
specialized terms will have the following meanings:
(1) "BASE PERIOD INCOME." "Base Period Income" is an amount equal
to Executive's "annualized includable compensation" for the "base period" as
defined in Sections 280G(d)(1) and (2) of the Internal Revenue Code of 1986, as
amended (the "Code") and the regulations adopted thereunder. Generally,
Executive's "annualized includable compensation" is the average of his annual
taxable income from the Company for the "base period," which is the five
calendar years prior to the year in which the Change of Control occurs.
(2) "CAP" OR "280G CAP." "Cap" or "280G Cap" shall mean an amount
equal to 2.99 times Executive's "Base Period Income." This is the maximum amount
which he may receive without becoming subject to the excise tax imposed by
Section 4999 of the Code or which Company may pay without loss of deduction
under Section 280G of the Code.
(3) "TOTAL PAYMENTS." The "Total Payments" include any "payments
in the nature of compensation" (as defined in Section 280G of the Code and the
regulations adopted thereunder), made pursuant to this Agreement or otherwise,
to or for Executive's benefit, the receipt of which is contingent or deemed
contingent on a Change of Control and to which Section 280G of the Code applies.
(c) INCLUSION OF SUCCESSOR SECTIONS. For purposes of this Section 11,
any reference to any Section of the Code shall also be deemed a reference to any
Code Section resulting from the modification, amendment, renumbering or
replacement of such Code Section.
(d) EFFECT OF REPEAL. If the provisions of Sections 280G and 4999 of
the Code are repealed without succession, this Section 11 shall be of no further
force or effect.
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12. CONFIDENTIAL INFORMATION. Employee acknowledges that Employee may
receive, or contribute to the production of, Confidential Information. For
purposes of this Agreement, Employee agrees that "Confidential Information"
shall mean any and all information or material proprietary to the Company or
designated as Confidential Information by the Company and not generally known by
non-Company personnel, which Employee develops or of or to which Employee may
obtain knowledge or access through or as a result of Employee's relationship
with the Company (including information conceived, originated, discovered or
developed in whole or in part by Employee). Confidential Information includes
the following types of information and other information of a similar nature
(whether or not reduced to writing) related to the Company's business:
discoveries, inventions, ideas, concepts, research, development, processes,
procedures, "know-how," formulae, marketing or manufacturing techniques and
materials, marketing and development plans, business plans, customer names and
other information related to customers, price lists, pricing policies, methods
of operation, financial information, employee compensation, and computer
programs and systems. Confidential Information also includes any information
described above which the Company obtains from another party and which the
Company treats as proprietary or designates as Confidential Information, whether
or not owned by or developed by the Company, including Confidential Information
acquired by the Company from any of its Affiliates. Employee acknowledges that
the Confidential Information derives independent economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use. Information publicly known without breach of this
Agreement that is generally employed by the trade at or after the time Employee
first learns of such information, or generic information or knowledge which
Employee would have learned in the course of similar employment or work
elsewhere in the trade, shall not be deemed part of the Confidential
Information. Employee further agrees:
(a) To furnish the Company on demand, at any time during or after
employment, a complete list of the names and addresses of all present, former
and potential suppliers, financing sources, clients, customers and other
contacts gained while an employee of the Company in Employee's possession,
whether or not in the possession or within the knowledge of the Company.
(b) That all notes, memoranda, electronic storage, documentation and
records in any way incorporating or reflecting any Confidential Information
shall belong exclusively to the Company, and Employee agrees to turn over all
copies of such materials in Employee's control to the Company upon request or
upon termination of Employee's employment with the Company.
(c) That while employed by the Company and thereafter Employee will
hold in confidence and not directly or indirectly reveal, report, publish,
disclose or transfer any of the Confidential Information to any person or
entity, or utilize any of the Confidential Information for any purpose, except
in the course of Employee's work for the Company.
(d) That any idea in whole or in part conceived of or made by Employee
during the term of his employment, consulting, or similar relationship with the
Company which relates directly or indirectly to the Company's current or planned
lines of business and is made through the use of any of the Confidential
Information of the Company or any of the Company's equipment, facilities, trade
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secrets or time, or which results from any work performed by Employee for the
Company, shall belong exclusively to the Company and shall be deemed a part of
the Confidential Information for purposes of this Agreement. Employee hereby
assigns and agrees to assign to the Company all rights in and to such
Confidential Information whether for purposes of obtaining patent or copyright
protection or otherwise. Employee shall acknowledge and deliver to the Company,
without charge to the Company (but at its expense) such written instruments and
do such other acts, including giving testimony in support of Employee's
authorship or inventorship, as the case may be, necessary in the opinion of the
Company to obtain patents or copyrights or to otherwise protect or vest in the
Company the entire right and title in and to the Confidential Information.
13. LOYALTY DURING EMPLOYMENT TERM. The provisions of this Section shall be
applicable only during Employee's term of employment hereunder. Employee agrees
that prior to an Election, Employee will devote substantially all of Employee's
business time and effort to and give undivided loyalty to the Company. Both
before and after an Election, Employee will not engage in any way whatsoever,
directly or indirectly, in any business that is competitive with the Company or
its affiliates, nor solicit, or in any other manner work for or assist any
business which is competitive with the Company or its affiliates, except that,
after an Election, Employee may work for or assist a division or affiliate of an
entity which competes with the Company through one or more separately managed
divisions or affiliates so long as Employee has no business responsibilities,
relationship or communication with the competing division or affiliate. Both
before and after an Election, Employee will undertake no planning for or
organization of any business activity competitive with the Company or its
affiliates, and Employee will not combine or conspire with any other employee of
the Company or any other person for the purpose of organizing any such
competitive business activity. However, Employee shall be entitled to make a
passive investment in a publicly traded stock of a competitor of the Company so
long as he does not at any time own more than 5% of the total outstanding stock
of such competitor.
14. NON-COMPETITION; NON-SOLICITATION. The parties acknowledge that
Employee will acquire much knowledge and information concerning the business of
the Company and its affiliates as the result of Employee's employment. The
parties further acknowledge that the scope of business in which the Company is
engaged as of the date of execution of this Agreement is world-wide and very
competitive and one in which few companies can successfully compete. Certain
activities by Employee after this Agreement is terminated would severely injure
the Company. Accordingly, until one year after Employee resigns pursuant to
Section 8(e) or Employee's employment is terminated for Cause as contemplated by
Section 8(a), Employee will not:
(a) Engage in any work activity for or in conjunction with any
business or entity that is in competition with or is preparing to compete with
the Company;
(b) Persuade or attempt to persuade any potential customer or client
to which the Company or any of its Affiliates has made a proposal or sale, or
with which the Company or any of its Affiliates has been having discussions, not
to transact business with the Company or such Affiliate, or instead to transact
business with another person or organization;
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(c) Solicit the business of any customers, financing sources, clients,
suppliers, or business patrons of the Company or any of its predecessors or
affiliates which were customers, financing sources, clients, suppliers, or
business patrons of the Company at any time during Employee's employment by the
Company, or within three years prior to the commencement of Employee's
employment by the Company, provided, however, that if Employee becomes employed
by or represents a business that exclusively sells products that do not compete
with products then marketed or intended to be marketed by the Company, such
contact shall be permissible; or
(d) Solicit, endeavor to entice away from the Company or any of its
Affiliates, or otherwise interfere with the relationship of the Company or any
of its Affiliates with, any person who is employed by or otherwise engaged to
perform services for the Company or any of its Affiliates, whether for
Employee's account or for the account of any other person or organization.
15. INJUNCTIVE RELIEF. It is agreed that the restrictions contained in
Sections 12, 13 and 14 of this Agreement are reasonable, but it is recognized
that damages in the event of the breach of any of those restrictions will be
difficult or impossible to ascertain; and, therefore, Employee agrees that, in
addition to and without limiting any other right or remedy the Company may have,
the Company shall have the right to an injunction against Employee issued by a
court of competent jurisdiction enjoining any such breach without showing or
proving any actual damage to the Company. This Section shall survive the
termination of Employee's employment.
16. PART OF CONSIDERATION. Employee also agrees, acknowledges, covenants,
represents and warrants that he is fully and completely aware that, and further
understands that, the restrictive covenants contained in Sections 12, 13 and 14
of this Agreement are an essential part of the consideration for the Company
entering into this Agreement and that the Company is entering into this
Agreement in full reliance on these acknowledgments, covenants, representations
and warranties.
17. TIME AND TERRITORY REDUCTION. If any of the periods of time and/or
territories described in Sections 12, 13 and 14 of this Agreement are held to be
in any respect an unreasonable restriction, it is agreed that the court so
holding may reduce the territory to which the restriction pertains or the period
of time in which it operates or may reduce both such territory and such period,
to the minimum extent necessary to render such provision enforceable.
18. SURVIVAL. The obligations described in Sections 12 and 14 of this
Agreement shall survive any termination of this Agreement or any termination of
the employment relationship created hereunder.
19. NONDELEGABILITY OF EMPLOYEE'S RIGHTS AND COMPANY ASSIGNMENT RIGHTS.
Except as otherwise provided in this Agreement, the obligations, rights and
benefits of Employee hereunder are personal and may not be delegated, assigned
or transferred in any manner whatsoever, nor are such obligations, rights or
benefits subject to involuntary alienation, assignment or transfer. Upon mutual
agreement of the parties, the Company upon reasonable notice to Employee may
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transfer Employee to an Affiliate of the Company, which Affiliate shall assume
the obligations of the Company under this Agreement. This Agreement shall be
assigned automatically to any entity merging with or acquiring the Company.
20. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Arizona, exclusive
of the conflict of law provisions thereof, and the parties agree that any
litigation pertaining to this Agreement shall be in courts located in Maricopa
County, Arizona.
21. ATTORNEYS' FEES. If any party finds it necessary to employ legal
counsel or to bring an action at law or other proceeding against the other party
to enforce any of the terms hereof, the party prevailing in any such action or
other proceeding shall be paid by the other party its reasonable attorneys' fees
as well as court costs all as determined by the court and not a jury.
22. NOTICES. All notices, demands, instructions, or requests relating to
this Agreement shall be in writing and, except as otherwise provided herein,
shall be deemed to have been given for all purposes (i) upon personal delivery,
(ii) one day after being sent, when sent by professional overnight courier
service from and to locations within the Continental United States, (iii) five
days after posting when sent by United States registered or certified mail, with
return receipt requested and postage paid, or (iv) on the date of transmission
when sent by facsimile with a hard-copy confirmation; if directed to the person
or entity to which notice is to be given at his or its address set forth in this
Agreement or at any other address such person or entity has designated by
notice.
To the Company: OrthoLogic Corp.
0000 X. Xxxxxxxxxx Xx.
Xxxxx, XX 00000
Attention: Chairman of the Board
To Employee: Xxxxxx X. Xxxxxxx
0000 X. Xxxxxxxxxx Xx.
Xxxxx, XX 00000
23. ENTIRE AGREEMENT. This Agreement and the Invention, Confidential
Information and Non-Competition Agreement executed in October 1997 constitute
the final written expression of all of the agreements between the parties
(except those relating to Employee's service as a director of the Company), and
are a complete and exclusive statement of those terms. They supersede all
understandings and negotiations concerning the matters specified herein. Any
representations, promises, warranties or statements made by either party that
differ in any way from the terms of these two written Agreements shall be given
no force or effect. The parties specifically represent, each to the other, that
there are no additional or supplemental agreements between them related in any
way to the matters herein contained unless specifically included or referred to
herein. No addition to or modification of any provision of either of such
Agreements shall be binding upon any party unless made in writing and signed by
all parties. To the extent that there is any conflict between this Agreement and
the Invention, Confidential Information and Non-Competition Agreement, the
provisions of this Agreement shall govern.
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24. EXHIBITS. All Exhibits to this Agreement are incorporated herein by
this reference as though fully set forth herein. In the event of any conflict,
contradiction or ambiguity between the terms and conditions in this Agreement
and any of its Exhibits, schedules or attachments, the terms of this Agreement
shall prevail.
25. CONSTRUCTION. The language in all parts of this Agreement shall in all
cases be construed as a whole according to its fair meaning and not strictly for
or against either party. The Section headings contained in this Agreement are
for reference purposes only and will not affect the meaning or interpretation of
this Agreement in any way. All terms used in one number or gender shall be
construed to include any other number or gender as the context may require. The
parties agree that each party has reviewed this Agreement and has had the
opportunity to have counsel review the same and that any rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall
not apply in the interpretation of this Agreement or any amendment or any
exhibits thereto. Whenever the words "include," "includes," or "including" are
used in the Agreement, they shall be deemed to be followed by the words "without
limitation.
26. WAIVER. The waiver by either party of the breach of any covenant or
provision in this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party.
27. INVALIDITY OF ANY PROVISION. The provisions of this Agreement are
severable, it being the intention of the parties hereto that should any
provisions hereof be invalid or unenforceable, such invalidity or
unenforceability of any provision shall not affect the remaining provisions
hereof, but the same shall remain in full force and effect as if such invalid or
unenforceable provisions were omitted.
28. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement.
29. BINDING EFFECT; BENEFITS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
successors, executors, administrators and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
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This Agreement has been executed by the parties as of July 15, 2002.
ORTHOLOGIC CORP.
(the "Company")
By:
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Xxxx X. Xxxxxxxx, III
Chairman of the Board
XXXXXX X. XXXXXXX
By:
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"Employee"
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EXHIBIT "A"
DEFINITIONS
I. DEFINITIONS
Capitalized terms used in this Exhibit A and not otherwise defined herein
shall have the meanings assigned to them in the Agreement to which this Exhibit
A is attached (the "Agreement"). Additionally, the following terms shall have
the meanings set forth below.
"AFFILIATE," means an entity affiliated with the Company.
"CHANGE IN CONTROL". For purposes of this Agreement, a "Change in Control"
means any one or more of the following events (except for a Sale of the ***):
(1) When the individuals who, at the beginning of any period of two years
or less, constituted the Board cease, for any reason, to constitute at least a
majority thereof unless the election or nomination for election of each new
director was approved by the vote of at least two thirds of the directors then
still in office who were directors at the beginning of such period;
(2) A change of control of the Company through a transaction or series of
transactions, such that any person (as that term is used in Section 13 and
14(d)(2) of the Securities Exchange Act of 1934 ["1934 Act"]), excluding
Affiliates of the Company as of the Effective Date, is or becomes the beneficial
owner (as that term is used in Section 13[d] of the 0000 Xxx) directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities;
(3) Any merger, consolidation or liquidation of the Company in which the
Company is not the continuing or surviving company or pursuant to which stock
would be converted into cash, securities or other property, other than a merger
of the Company in which the holders of the shares of stock immediately before
the merger have the same proportionate ownership of common stock of the
surviving company immediately after the merger;
(4) The shareholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company; or
Substantially all of the assets of the Company are sold or otherwise
transferred to parties that are not within a "controlled group of corporations"
(as defined in Section 1563 of the Internal Revenue Code of 1986, as amended
(the "Code") in which Parent is a member prior to such sale or transfer.
(5) "CODE," means the Internal Revenue Code of 1986, as amended.
(6) "SALE OF THE ***." ***.
**Text has been omitted pursuant to a confidentiality request. Omitted text has
been filed with the Securities & Exchange Commission.
EXHIBIT B
CALCULATION OF SPECIAL BONUSES
I. BONUS AFTER A CHANGE IN CONTROL
Upon the closing of a Change in Control while he is still an employee of
the Company, Employee shall be entitled to receive, as a lump sum, a special
bonus payment according to the following schedule:
[**]
II. BONUS AFTER A SALE OF THE ***
Upon the closing of a Sale of the *** while he is still an employee of the
Company, Employee shall be entitled to receive, as a lump sum, a special bonus
payment equal to [***].
**Text has been omitted pursuant to a confidentiality request. Omitted text has
been filed with the Securities & Exchange Commission.
