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EXHIBIT 10.34
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT"), dated effective as
of November 12, 1997, is between Imagyn Medical Technologies, Inc., a Delaware
corporation (the "COMPANY"), and Xxxxxxx X. Xxxxxx ("EMPLOYEE").
A. The Company desires to obtain the continued services of
Employee, on its own behalf and on behalf of all existing and future "AFFILIATED
COMPANIES" (defined as any corporation or other business entity or entities that
directly or indirectly controls, is controlled by, or is under common control
with the Company), and Employee desires to continue in the employment of the
Company upon the following terms and conditions.
B. The Company has spent significant time, effort and money to
develop certain Proprietary Information (as defined below), which the Company
considers vital to its business and goodwill.
C. The Proprietary Information will necessarily be communicated to
or acquired by Employee in the course of his employment with the Company, and
the Company desires to obtain the continued services of Employee, only if, in
doing so, it can protect its Proprietary Information and goodwill.
ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
1. Period of Employment.
(a) The Company hereby employs Employee to render services
to the Company in the position and with the duties and responsibilities
described in Section 2 for the period (the "PERIOD OF EMPLOYMENT") beginning
November 12, 1997 and ending on the earlier of (i) October 31, 1999 (the "TERM
DATE") and (ii) the date the Period of Employment is terminated in accordance
with Section 4.
(b) Unless terminated pursuant to Section 4, this Agreement
shall be automatically renewed for two (2) successive one (1) year terms.
2. Position, Duties and Responsibilities.
(a) Position. Employee hereby accepts employment with the
Company as President, Urology Division or in such position or positions as the
Chief Executive Officer of the Company shall designate. Employee shall devote
his best efforts and his full time and attention to the performance of the
services customarily incident to such office and to such other services as may
be reasonably requested by the Chief Executive Officer of the Company.
(b) Full-Time Employment. Employee shall devote full time
to Employee's employment, and shall expend best efforts on behalf of the
Company. Employee agrees that
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while employed by the Company, Employee will not engage in any other employment
or business which could interfere with the performance of Employee's duties to
the Company, or compete with the Company in any way. Employee agrees to abide by
all policies and decisions of the Company during the term of this Agreement.
(c) Competitive Plans. Employee agrees not to take any
preliminary steps to set up or engage in any business enterprises that would
compete in any way with the Company during the term of this Agreement. While
employed by the Company, Employee agrees to divulge to the Company any and all
competitive plans which Employee may have under consideration, whether or not
Employee intends to act upon them. As used in the preceding sentence, the term
"competitive plans" shall include, but not be limited to, plans to set up,
establish or engage in a business enterprise in competition with the Company,
and plans to seek or accept employment from anyone in competition with the
Company.
(d) Business Opportunities. Employee agrees promptly and
fully to disclose to the Company, and not to divert to Employee's own use or
benefit, or the use or benefit of others, any business opportunities involving
any past, existing or prospective lines of business, suppliers, products or
other business activities of the Company, or any other business opportunities
that should otherwise be disclosed to the Company.
3. Compensation, Benefits and Expenses.
(a) Compensation. In consideration of the services to be
rendered hereunder, including, without limitation, services to any Affiliated
Company, Employee shall be paid an annual salary of Two Hundred Thousand Dollars
($200,000), payable in 24 equal installments at the times and pursuant to the
procedures regularly established, and as they may be amended, by the Company
during the term of this Agreement.
(b) Bonus.
(i) For the period ending March 31, 1998, Employee's
bonus shall be determined by the performance of the Med/Surg Division and on
certain key objectives related to the Urology Division. Company will provide
Employee with the details of such bonus plan
(ii) Thereafter, Employee shall be eligible to
receive, in the discretion of the Board of Directors (the "Board"), a
performance bonus (or other special bonuses), in such amounts as determined by
the Board based upon the Board's evaluation of the performance of Employee, the
Company's operating results and such other criteria determined by the Board to
be relevant.
(c) Benefits. As he becomes eligible therefor, the Company
shall provide Employee with the right to participate in and to receive benefits
from all present and future life, accident, disability, medical, pension and
savings plans and all similar benefits made available generally to the Company's
other similarly situated employees. The amount and extent of
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benefits to which Employee is entitled shall be governed by the specific benefit
plan, as it may be amended from time to time.
(d) Vacation. Employee shall be entitled to three weeks of
vacation per year, exclusive of Company holidays.
(e) Expenses. The Company shall reimburse Employee for
reasonable travel and other business expenses incurred by Employee in the
performance of his duties hereunder in accordance with the Company's general
policies, as they may be amended from time to time during the term of this
Agreement. This includes all living expenses and transportation expenses
associated with temporary living in Augusta, GA. To include: apartment rental,
telephone, utilities, gratuities, staples, car rental, laundry, etc. for the
period employee is living and managing Urology division in Augusta, GA.
4. Termination of Employment.
(a) By Death. The Period of Employment shall terminate
automatically upon the death of Employee. The Company shall pay to Employee's
beneficiaries or estate, as appropriate, the compensation to which he is
entitled pursuant to Section 3(a) through the end of the month in which death
occurs. Thereafter, the Company's obligations hereunder shall terminate. Nothing
in this section shall affect any entitlement of Employee's heirs to the benefits
under any life insurance plan.
(b) By Disability. If, in the sole opinion of the Board,
Employee shall be prevented from properly performing his duties hereunder by
reason of any physical or mental incapacity for a period of more than 150 days
in the aggregate or 120 consecutive days in any twelve-month period, then, to
the extent permitted by law, the Period of Employment shall terminate on and the
compensation to which Employee is entitled pursuant to Section 3(a) shall be
paid up through the last day of the month in which the Board determines Employee
to be disabled hereunder, and thereafter the Company's obligations hereunder
shall terminate. Nothing in this section shall affect Employee's rights under
any disability plan in which he is a participant.
(c) By Company For Cause. The Company may terminate,
without liability, the Period of Employment for Cause (as defined below) at any
time upon 15 days advance written notice to Employee. The Company shall pay
Employee the compensation to which he is entitled pursuant to Section 3(a)
through the end of the notice period and thereafter the Company's obligations
hereunder shall terminate. Termination shall be for "CAUSE" if: (i) Employee has
engaged in illegal or other wrongful conduct substantially detrimental to the
business or reputation of the Company or any Affiliated Company, or is charged
with or convicted of a felony; (ii) Employee refuses or fails to act in
accordance with any reasonable direction or order of the Board or his immediate
superiors; provided, that the Board or such superiors has given Employee written
notice of such refusal or failure and Employee fails to comply with such
direction or order within 15 days after the date of such notice; or (iii)
Employee has engaged in any fraud, embezzlement, misappropriation or similar
conduct against the Company.
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(d) By Company Without Cause. The Company may terminate the
Period of Employment without Cause at any time upon 90 days' advance written
notice to Employee. Upon such termination, and subject to Employee's compliance
with provisions of Section 6 hereof, the Company shall pay Employee an amount
equal to the greater of (i) the amount of compensation to which he is entitled
pursuant to Section 3(a) and 3(b) for the remainder of the Period of Employment;
or (ii) One times the total salary and bonus compensation paid to Employee by
the Company pursuant to Section 3(a) and 3(b) for the twelve months immediately
preceeding the termination date. If such termination occurs within the first
year of this Agreement, Company shall relocate Employee back to the Kansas City
area and reimburse costs associated therewith in accordance with the Company's
standard relocation policy in effect as of the effective date of this Agreement.
Thereafter, all obligations of the Company hereunder shall terminate. In the
event that the Period of Employment is terminated without Cause, the payments
required under this Section 4(d) shall be made in accordance with the then
normal payroll practices of the Company.
(e) Termination Obligations.
(i) Employee hereby acknowledges and agrees that all
personal property, including, without limitation, all books, manuals, records,
reports, notes, contracts, lists, blueprints and other documents, or materials,
or copies thereof, Proprietary Information (as defined below), furnished to or
prepared by Employee in the course of or incident to his employment, including,
without limitation, records and any other materials pertaining to Invention
Ideas (as defined below), belong to the Company.
(ii) Upon termination of the Period of Employment,
Employee shall be deemed to have resigned from all offices then held with the
Company or any Affiliated Company.
(iii) The representations and warranties contained
herein and Employee's obligations under Sections 4(e) and 6 shall survive
termination of the Period of Employment and the expiration of this Agreement.
5. Change of Control. Following a "Change of Control", Employee
shall be entitled to terminate his employment hereunder, with or without "GOOD
REASON," upon 30 days advance written notice to the Company given at any time
during the one-year period after the Change of Control. In the event that
Employee terminates his employment pursuant to this Section 5 with Good Reason
(as defined below) after a Change of Control, or, if during such one-year period
Employee's employment is terminated by the Company without Cause, then in lieu
of any severance payments that would otherwise be payable under Section 4(d) he
shall be entitled to receive a lump sum payment upon such termination of an
amount equal to the greater of (i) an amount equal to the total salary and bonus
compensation paid to Employee by the Company pursuant to Section 3(a) and 3(b)
for the twelve months immediately preceding the Change of Control and (ii) the
remaining amounts payable by the Company pursuant to Section 3(a) through the
Term Date; provided, however, that if the severance payment under this Section
5, either alone or together with other payments which Employee has the right to
receive
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from the Company, would not be deductible (in whole or in part) by the
Company as a result of such payment constituting a "parachute payment" (as
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"CODE")), the severance payment provided under this Section 5 shall be reduced
to the maximum deductible amount under the Code. Should such termination occur
within two years from the effective date of this Agreement, Company agrees to
relocate Employee to the Kansas City, Missouri area in accordance with the
Company's standard relocation policy in effect as of the effective date of this
Agreement. For purposes of this Agreement, a Change of Control of the Company
shall be deemed to have occurred if (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company's
Common Stock would be converted into cash, securities or other property, other
than a merger of the Company in which the holders of the Company's Common Stock
immediately prior to the merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the merger, (y) any reverse
merger in which the Company is the continuing or surviving corporation but in
which securities possessing more than 50% of the total combined voting power of
the Company's outstanding securities are transferred to a person or persons
different from those who hold such securities immediately prior to the merger,
or (z) any sale, lease, exchange or other transfer (in one transaction or series
of related transactions) of all, or substantially all, of the assets of the
Company, or (ii) the stockholders of the Company approve a plan or proposal for
the liquidation or dissolution of the Company, or (iii) any "person" (as defined
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT")), shall become the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of 20% or more of the
Company's outstanding Common Stock (other than as a result of a stock purchase
or purchases made by such person directly from the Company), or (iv) during any
twelve-month period, individuals who at the beginning of such period constitute
the entire Board of Directors of the Company shall cease for any reason to
constitute a majority thereof unless the election, or the nomination for
election by the Company's stockholders, of each new director was approved by a
vote of at least a majority of the directors then still in office who were
directors at the beginning of the period. For purposes of this Section 5, "GOOD
REASON" shall exist if (i) the place of business at which Employee is
principally employed is relocated to a location more than 50 miles from such
location on the date of the Change of Control or (ii) there is an assignment to
Employee of any duties materially inconsistent with or which constitute a
material change in Employee's position, duties, responsibilities or status with
the Company or which assignment involves a substantial diminution in Employee's
level of responsibility; provided that continuation of Employee's primary
responsibilities after a Change of Control shall not constitute a diminution of
Employee's level of responsibility.
6. Proprietary Information.
(a) Defined. "PROPRIETARY INFORMATION" is all information
and any idea in whatever form, tangible or intangible, pertaining in any manner
to the business of the Company or any Affiliated Company, or to its clients,
consultants or business associates, unless: (i) the information is or becomes
publicly known through lawful means; (ii) the information was rightfully in
Employee's possession or part of his general knowledge prior to his employment
by
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the Company; or (iii) the information is disclosed to Employee without
confidential or proprietary restriction by a third party who rightfully
possesses the information (without confidential or proprietary restriction) and
did not learn of it, directly or indirectly, from the Company.
(b) General Restrictions on Use. Employee agrees to hold
all Proprietary Information in strict confidence and trust for the sole benefit
of the Company and not to, directly or indirectly, disclose, use, copy, publish,
summarize or remove from the Company's premises any Proprietary Information (or
remove from the premises any other property of the Company), except (i) during
the Period of Employment to the extent necessary to carry out Employee's
responsibilities under this Agreement , and (ii) after termination of the Period
of Employment as specifically authorized in writing by the Board.
(c) Interference with Business; Competitive Activities.
Employee acknowledges that pursuit of the activities prohibited by this Section
6(c) would necessarily involve the use or disclosure of Proprietary Information
in breach of Section 6(b), but that proof of such breach would be extremely
difficult. To prevent such disclosure, use and breach and in consideration of
employment under this Agreement, Employee agrees for a period of one year after
termination of the Period of Employment, he shall not for himself or herself or
any third party, directly or indirectly, (i) divert or attempt to divert from
the Company (or any Affiliated Company) any business of any kind in which it is
engaged, including, without limitation, the solicitation of or interference with
any of its suppliers or customers, (ii) employ, solicit for employment, or
recommend for employment any person employed by the Company, or any Affiliated
Company, during the period of such person's employment and for a period of one
year thereafter, or (iii) engage in any business activity that is competitive
with the Company, unless Employee can prove that action taken in contravention
of this Section 6(c)(iii) was done without the use of any Proprietary
Information; provided, that in no event shall Employee engage in such
competitive activities during the period which Employee continues to receive
payments pursuant to Section 4(d) above. For purposes of this Section 5(c),
"competitive activities" shall be business activities that are directly
competitive with an existing or presently planned business of the Company on the
date of termination, which activity constitutes or is anticipated to constitute
more than 15% of revenues of the Company.
(d) Remedies. Nothing in this Section 6 is intended to
limit any remedy of the Company under the California Uniform Trade Secrets Act
(California Civil Code Section 3426), or otherwise available under law.
7. Assignment; Successors and Assigns.
Employee agrees that he will not assign, sell, transfer,
delegate or otherwise dispose of, whether voluntarily or involuntarily, or by
operation of law, any rights or obligations under this Agreement , nor shall
Employee's rights be subject to encumbrance or the claims of creditors. Any
purported assignment, transfer or delegation shall be null and void. Nothing in
this Agreement shall prevent the consolidation of the Company with, or its
merger into, any other corporation, or the sale by the Company of all or
substantially all of its properties or assets,
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or the assignment by the Company of this Agreement and the performance of its
obligations hereunder to any successor in interest or any Affiliated Company.
Subject to the foregoing, this Agreement shall be binding upon and shall inure
to the benefit of the parties and their respective heirs, legal representatives,
successors and permitted assigns, and shall not benefit any person or entity
other than those enumerated above.
8. Notices. All notices or other communications required or
permitted hereunder shall be made in writing and shall be deemed to have been
duly given if delivered by hand or mailed, postage prepaid, by certified or
registered mail, return receipt requested, and addressed to the Company at:
Imagyn Medical Technologies, Inc.
0 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
or to Employee at:
Notice of change of address shall be effective only when done in accordance with
this section.
9. Entire Agreement. The terms of this Agreement are intended by
the parties to be the final expression of their agreement with respect to the
employment of Employee by the Company and may not be contradicted by evidence of
any prior or contemporaneous agreement. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative or other legal proceeding involving this Agreement.
10. Amendments; Waivers. This Agreement may not be modified,
amended or terminated except by an instrument in writing, signed by Employee and
by a duly authorized representative of the Company other than Employee. By an
instrument in writing similarly executed, either party may waive compliance by
the other party with any provision of this Agreement that such other party was
or is obligated to comply with or perform, provided, however, that such waiver
shall not operate as a waiver of, or estoppel with respect to, any other or
subsequent failure. No failure to exercise and no delay in exercising any right,
remedy or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy or power hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy or
power provided herein or by law or in equity.
11. Severability; Enforcement. If any provision of this Agreement,
or the application thereof to any person, place or circumstance, shall be held
by a court of competent
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jurisdiction to be invalid, unenforceable or void, the remainder of this
Agreement and such provisions as applied to other persons, places and
circumstances shall remain in full force and effect.
12. Governing Law. The validity, interpretation, enforceability
and performance of this Agreement shall be governed by and construed in
accordance with the law of the State of California.
13. Injunctive Relief. The parties agree that in the event of any
breach or threatened breach of any of the covenants in Section 6, the damage or
imminent damage to the value and the goodwill of the Company's business will be
irreparable and extremely difficult to estimate, making any remedy at law or in
damages inadequate. Accordingly, the parties agree that the Company shall be
entitled to injunctive relief against Employee in the event of any breach or
threatened breach of any such provisions by Employee, in addition to any other
relief (including damages) available to the Company under this Agreement or
under law.
The parties have duly executed this Agreement as of the date first
written above.
/s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
EMPLOYEE
Imagyn Medical Technologies, Inc.
By /s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
Chairman of the Board and
Chief Executive Officer
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