EMPLOYMENT AGREEMENT, dated as of March 19, 1996, by and
between GENDEX-DEL MEDICAL IMAGING CORP., a Delaware corporation with offices at
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Corporation"), and
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, an individual residing at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive").
W I T N E S S E T H:
WHEREAS, the Corporation desires to secure the services of the
Executive upon the terms and conditions hereinafter set forth; and
WHEREAS, the Executive desires to render services to the
Corporation upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties mutually agree as follows:
Section 1. Employment. The Corporation hereby employs the
Executive and the Executive hereby accepts such employment, as an executive of
the Corporation, subject to the terms and conditions set forth in this
Agreement.
Section 2. Duties. Executive shall serve as Vice President and
General Manager of the Corporation and shall properly perform such duties
consistent with the positions of Vice President and General Manager, as may be
assigned to him from time to time by the Executive Vice President or the
Chairman and Chief Executive Officer of the Corporation or Del Global
Technologies Corp. ("Del"). Executive shall be employed at the Corporation's
Chicago, Illinois facility and shall remain employed within a radius of 25 miles
of such facility at all times during the term of this Agreement. If requested by
the Corporation and with Executive's consent, the Executive shall serve
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on the Board of Directors of the Corporation or any affiliates thereof, or on
any committee of such Boards of Directors, without additional compensation,
provided that Executive is indemnified to the same extent as other Directors of
the Corporation. During the term of this Agreement, the Executive shall devote
all of his business time to the performance of his duties hereunder unless
otherwise authorized by the Board of Directors.
Section 3. Term of Employment. The term of the Executive's
employment shall commence as of the date hereof and shall continue for three (3)
years from the date hereof or until terminated pursuant to Section 5 hereof.
Section 4. Compensation of Executive.
4.1. Compensation. The Corporation shall pay to the
Executive as annual compensation for his services hereunder a base salary ("Base
Salary") as follows: (i) for the period commencing with the date hereof and
ending twelve (12) months from the date hereof, the Executive shall be paid a
Base Salary equal to One Hundred Twenty-Five Thousand ($125,000) Dollars; (ii)
for the next twelve (12) month period, the Executive shall be paid a Base Salary
equal to One Hundred Thirty-One Thousand Two Hundred Fifty ($131,250) Dollars;
and (iii) for the next twelve (12) month period, the Executive shall be paid a
Base Salary equal to One Hundred Thirty-Seven Thousand Eight Hundred Twelve
($137,812) Dollars.
The Base Salary shall be payable bi-weekly, in
accordance with the Corporation's regular payroll practices, less such
deductions as shall be required to be withheld by applicable law and
regulations.
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4.2. Bonus. In addition to his annual Base Salary
the Executive shall receive a bonus ("Bonus") with respect to each fiscal year,
or portion thereof, of employment equal to three (3%) percent of the
Corporation's Pre-Tax Net Income (as hereinafter defined) in excess of $500,000
for such year. The Executive shall receive the pro rata portion of the Bonus
based on the portion of the Corporation's fiscal year that has elapsed, for the
periods (i) commencing on the date hereof and ending July 30, 1996, the last day
of the Corporation's 1996 fiscal year; and (ii) commencing on the first day of
the Corporation's fiscal year beginning August 1997 and ending three years after
the date of this Agreement. The Bonus shall be payable within sixty (60) days
after the Corporation's regularly employed independent certified public
accountants ("Accountants") determine the Pre-Tax Net Income for each fiscal
year during the term of this Agreement.
4.3. Stock Options. Del, the Corporation's parent
corporation, has previously granted to Executive the option to purchase 15,000
shares of its common stock, $.10 par value at an exercise price of $8.00 per
share. Del represents and warrants that the shares of common stock underlying
such options have been registered pursuant to an effective Form S-8 registration
statement filed with the Securities and Exchange Commission.
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Executive's Base Salary for such year, as determined by the Corporation's
Accountants, a copy of which determination shall be delivered to Executive
contemporaneously with the payment of the Bonus. No allocation shall be made for
general or administrative expenses of Del or intercompany loans or for other
allocations that do not confer a direct or indirect benefit to the Corporation
and all transactions between the Corporation and affiliates shall be on a
consistent basis as is Del's practice with its other affiliates.
4.5. Expenses. The Corporation shall pay or
reimburse the Executive for all reasonable and necessary business, travel or
other expenses, upon proper documentation thereof, which may be incurred by him
in connection with the rendition of the services contemplated hereunder.
4.6. Benefits. Executive shall be entitled to
participate in such group insurance, hospitalization, and group health benefit
plans and option plans, profit sharing plans and all other benefits and plans as
the Corporation provides to its executives to the extent that the Executive is
eligible under the terms of such plans. The Corporation shall provide Executive
with a monthly $400 automobile allowance and upon presentation of documentation
thereof, the Corporation shall reimburse Executive for the reasonable fuel,
maintenance and insurance expenses of such automobile.
4.7. Discretionary Payments. Nothing herein shall
preclude the Corporation from paying Executive such bonus or bonuses or other
compensation, as the Board of Directors, in their discretion, may authorize from
time to time.
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Section 5. Termination.
5.1. Termination of Employment. This Agreement shall
terminate upon the death, Disability, as hereinafter defined, or termination of
employment of the Executive For Cause, as hereinafter defined, or because
Executive wrongfully leaves his employment hereunder. In the event of a
termination For Cause or because Executive wrongfully leaves his employment
hereunder, the Corporation shall pay Executive all accrued and unpaid Base
Salary through the date of termination. In the event of termination upon the
death or Disability of Executive or if Executive's employment is terminated by
the Corporation without cause, the Corporation shall pay to the Executive, any
person designated by the Executive in writing or if no such person is
designated, to his estate, as the case may be, the aggregate amount of the
accrued and unpaid Base Salary and accrued and unpaid Bonus, on a pro rata basis
through the date of such termination. All payments for accrued pro rata payments
of Bonus shall be payable in accordance with the provisions of Section 4.2
hereof. In addition, Executive or his estate shall be entitled to receive all
benefits accrued to the date of termination pursuant to the Corporation's
incentive or benefit plans.
5.2. Disability Defined. As used herein,
"Disability" shall mean the Executive is mentally or physically incapable or
unable to perform his regular and customary duties of employment with the
Corporation for a period of ninety (90) consecutive days or for a period of one
hundred twenty (120) days in any one hundred eighty (180) day period.
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5.3. "For Cause" Defined. As used herein, the term
"For Cause" shall mean the following events only:
(i) Executive's conviction or indictment in
a court of law of any crime or offense involving willful
misappropriation of money or other property or any other crime
(whether or not involving the Corporation) involving moral
turpitude and which constitutes a felony; or
(ii) The material breach by Executive of any
provision of this Agreement and Executive shall have failed to
cure such breach within thirty (30) days of the receipt by
Executive of written notice detailing the alleged breach of
this Agreement; provided, however, that Executive shall not
have the right to cure a material breach if a substantially
similar breach of this Agreement has occurred at any other
time during the term of this Agreement; or
(iii)Willful misconduct or reckless
disregard of his responsibilities under this Agreement.
Section 6. Covenant Not To Compete.
6.1. Non-Compete. The parties confirm that it is
reasonably necessary for the protection of the Corporation that Executive agree,
and accordingly, Executive does hereby agree, that he will not, directly or
indirectly, except for the benefit of the Corporation, at any time during the
"Restricted Period", as hereinafter defined:
(i) engage in any business competitive with
the business (the "Business") conducted by the Corporation or
by Dynarad Corp.
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("Dynarad"), an affiliate of the Corporation, for his account
or render any services, which constitute engaging in the
Business, in any capacity to any person (other than the
Corporation or its affiliates); or become interested in any
persons engaged in the Business (other than the Corporation or
its affiliates) as a partner, shareholder, officer, director,
principal, agent, employee, trustee, consultant or in any
other relationship or capacity;
(ii) solicit, or cause or authorize,
directly or indirectly, to be solicited, for or on behalf of
himself or any third party, any employee, representative or
agent of the Corporation or Dynarad; or
(iii) solicit directly or indirectly (x) any
supplier which has sold products to the Corporation or Dynarad
(or which has at the time of such termination a current quote
or proposal to the Corporation or Dynarad or (y) any customer
of the Corporation or Dynarad (or which has at the time of
such termination a current quote or proposal from the
Corporation or Dynarad).
6.2. Unenforceability. If any of the restrictions
contained in this Section 6 shall be deemed to be unenforceable by reason of the
extent, duration or geographical scope thereof, or otherwise, then the court
making such determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof, and in its reduced form this
Section shall then be enforceable in the manner contemplated hereby.
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6.3. Restricted Period. The term "Restricted Period"
as used in this Section 6, shall mean the period of Executive's employment
hereunder plus one (1) year.
6.4. Survival. The provisions of this Section 6
shall survive the expiration or prior termination of Executive's employment
hereunder and until the end of the Restricted Period as provided in Section 6.3
hereof.
6.5. Termination Without Cause. Notwithstanding
anything to the contrary set forth in this Agreement, the covenant not to
compete set forth in this Section 6 shall not apply in the event Executive's
employment is terminated without cause.
Section 7. Disclosure of Confidential Information.
(i) Executive recognizes that he will have
access to secret and confidential information regarding the
Corporation and Dynarad, its product, know-how, customers and
plans. Executive acknowledges that such information is of
great value to the Corporation and Dynarad, is the sole
property of the Corporation and Dynarad and has been and will
be acquired by him in confidence. In consideration of the
obligations undertaken by the Corporation herein, Executive
will not, at any time, during or after his employment
hereunder, reveal, divulge or make known to any person, any
information acquired by Executive during the course of his
employment, which is treated as confidential by the
Corporation or its affiliates and not otherwise in the public
domain; and
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(ii) The provisions of this Section 7 shall
survive Executive's employment hereunder.
Section 8. Injunctive Relief. Executive acknowledges that the
services to be rendered under the provisions of this Agreement are of a special,
unique and extraordinary character and that it would be difficult or impossible
to replace such services. Accordingly, Executive agrees that any breach or
threatened breach by him of Sections 6 or 7 of this Agreement shall entitle the
Corporation, in addition to all other legal remedies available to it, to apply
to any court of competent jurisdiction to enjoin such breach or threatened
breach without the requirement of posting a bond or other security or showing
special damages. The parties understand and intend that each restriction agreed
to by Executive hereinabove shall be construed as separable and divisible from
every other restriction, that the unenforceability of any restriction shall not
limit the enforceability, in whole or in part, of any other restriction, and
that one or more or all of such restrictions may be enforced in whole or in part
as the circumstances warrant. In the event that any restriction in this
Agreement is more restrictive than permitted by law in the jurisdiction in which
the Corporation seeks enforcement thereof, such restriction shall be limited to
the extent permitted by law.
Section 9. Severance Pay. In the event Executive's employment
by the Corporation is not continued for an additional one (1) year beyond the
term of this Agreement for any reason other than For Cause, at the end of such
additional year the Corporation shall pay the Executive an amount equal to the
difference between (x) the Base Salary of Executive during the last twelve (12)
months of the term of this Agreement and (y) any compensation of any kind
whatsoever which Executive is entitled to receive as a result of his employment
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by another entity during such additional one (1) year period.
Section 10. Miscellaneous.
10.1. Entire Agreement. This Agreement constitutes and
embodies the full and complete understanding and agreement of the parties with
respect to the Executive's employment by the Corporation, supersedes all prior
understandings and agreements, if any, whether oral or written with respect to
the matters covered by this Agreement, between the Executive and the Corporation
and shall not be amended, modified or changed except by an instrument in writing
executed by the party to be charged. The invalidity or partial invalidity of one
or more provisions of this Agreement shall not invalidate any other provision of
this Agreement. No waiver by either party of any provision or condition to be
performed shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or any prior or subsequent time.
10.2. Binding Effect. This Agreement shall inure to the
benefit of, be binding upon and enforceable against, the parties hereto and
their respective successors and permitted assigns.
10.3. Assignment. This Agreement, and the Executive's rights
and obligations hereunder, may not be assigned by the Executive other than as
expressly provided herein. Any purported assignment by Executive in violation
hereof shall be null and void.
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10.4. Captions. The captions contained in this Agreement are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.5. Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given when personally delivered or sent by
certified mail, postage prepaid, or special overnight delivery to the party at
the address set forth above or to such other address as either party may
hereafter give notice of in accordance with the provisions hereof.
10.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. Except in
respect of any action commenced by a third party in another jurisdiction, the
parties hereto agree that any legal suit, action, or proceeding against them
arising out of or relating to this Agreement shall be brought exclusively in the
United States Federal Courts or Nassau County Supreme Court, in the State of New
York. The parties hereto hereby accept the jurisdictions of such courts for the
purpose of any such action or proceeding, and agree that venue for any action or
proceeding brought in the State of New York shall lie in the Eastern District of
New York or Supreme Court, Nassau County, as the case may be. Each of the
parties hereto hereby irrevocably consents to the service of process in any
action or proceeding in such courts by the mailing thereof by United States
registered or certified mail postage prepaid at its address set forth herein.
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10.7. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date set forth above.
As to Section 4.3 only: GENDEX-DEL MEDICAL IMAGING CORP.
DEL GLOBAL TECHNOLOGIES CORP.
By:/S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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By:/S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman
CEO and President
/S/▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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