Exhibit 10.31
EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is made and entered into as of
the 17th day of January, 2000 between eMed Technologies Corporation
("Employer"), a Delaware corporation, and ▇▇▇▇▇ ▇▇▇▇▇ ("Executive"). Where not
otherwise defined herein, capitalized terms used herein have the meanings set
forth in Section 7.1 of this Agreement.
WHEREAS, Employer wishes to employ Executive in an executive capacity, as
its Chief Executive Officer, and Executive wishes to accept such employment, on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises, benefits and
covenants herein contained, Employer and Executive hereby agree as follows:
1. Term.
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1.1 Employer employs Executive and Executive accepts such employment,
for a period ending on December 31, 2001 (the "Initial Term").
1.2 This Agreement shall be automatically renewed for additional one-
year terms (a "Renewal Term") upon the expiration of the Initial Term or any
Renewal Term unless either party delivers to the other written notice of
expiration within 60 days prior to the end of the then current term.
1.3 This Agreement may be terminated prior to the expiration of the
Initial Term or any Renewal Term as provided in Section 4 of this Agreement.
2. Positions and Duties.
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2.1 During the term of this Agreement, Employer shall employ Executive
to serve as Chief Executive Officer of Employer subject to the terms of this
Agreement and except as Executive and Employer otherwise agree in writing.
Executive shall perform such executive, administrative, and operational duties
customary for executives in such capacity or as may be assigned to Executive
from time to time by the Board of Directors of Employer.
2.2 Executive agrees to serve Employer faithfully and to the best of
Executive's ability and to devote substantially all of Executive's business
time, attention and efforts to the interests and business of Employer and its
Subsidiaries. Nothing contained herein shall preclude Executive from serving on
the board of one business corporation (other than Employer and its subsidiaries)
and on boards of not-for-profit organizations and trade groups, nor from
participating in community affairs, provided that such activities do not
materially interfere with Executive's performance of her duties and
responsibilities to Employer. The Executive warrants to Employer that Executive
is not under any contractual commitment prohibiting or limiting Executive's
employment by Employer. Executive will also serve as chief executive officer of
any subsidiaries of Employer, unless otherwise mutually agreed between Executive
and Employer.
2.3 Executive agrees at all times to perform her duties in accordance
with applicable laws, rules, and regulations and the policies and procedures of
Employer applicable to senior executives.
3. Compensation, Benefits, and Expenses.
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3.1 Salary. During the period from the Effective Date through the
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Initial Term and any Renewal Term of the Agreement, and except as otherwise
provided in the Agreement, Employer shall pay to Executive an annual base salary
of $225,000, or such greater amount as may be determined from time to time by
the Board of Directors (the "Base Salary Amount"), in installments pursuant to
Employer's standard payroll policies and subject to such withholding or
deductions as may be mutually agreed between Employer and Executive or required
by law. The Board of Directors shall review Executive's salary not less
frequently than annually, prior to February 1 of each year.
3.2 Incentive Compensation. (a) In addition to the salary set forth in
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Section 3.1, Executive shall be entitled to earn an annual bonus of up to 70% of
base salary at the discretion of the Board of Directors based upon performance.
It is the present intention of Employer that an annual bonus of at least 35% of
base salary will be paid.
(b) An additional bonus of $120,000 for the year 2000 will be paid to
Executive if certain milestones established by the Compensation Committee
of the Board of Directors of Employer are achieved within six months of the
Effective Date.
(c) Executive may, at her option, elect to receive all or part of any
bonus payable hereunder in the form of common stock of Employer. Any such
election shall be made in writing after the award of such bonus and prior
to payment. Employer shares shall be valued for this purpose at their Fair
Market Value as of the date of delivery of the election.
3.3 Stock Options. (a) Employer will grant to Executive, effective upon
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the Effective Date, options under Employer's 1994 Stock Plan to purchase 461,760
shares of Employer's Common Stock (which are equal to 4% of Employer's fully
diluted common stock as of December 31, 1999) at an exercise price of $ 2.75 per
share. Employer will grant to Executive, not later than the first anniversary
of the Effective Date and subject to Executive having continuously served as
Chief Executive Officer until that date, options under the 1994 Plan to purchase
a number of shares equal to 1% of the fully diluted common stock of Employer as
of the date of grant. All options granted to Executive will be qualified as
incentive stock options under the Internal Revenue Code to the maximum extent
permitted by applicable law. The option grants contemplated by this Section 3.3
are subject to amendment of Employer's 1994 Stock Plan to increase the number of
shares available for grant thereunder. The Board of Directors of Employer has
approved such an amendment and Employer will promptly and diligently seek
shareholder approval of such amendment.
(b) Options granted to Executive will vest in equal quarterly
installments over four years, with the first installment of the initial
grant vesting on March 31, 2000. Vesting of options will be subject to
acceleration upon a Change of Control so that (i) if a Change of Control
occurs within 6 months after the Effective Date, vesting will be
accelerated to the extent that Option Value of all vested options then held
would be equal
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to $2,000,000; (ii) if a Change of Control occurs after six months and
within 18 months of the Effective Date, vesting of 50% of the then unvested
options will be accelerated; and (iii) if a Change of Control occurs more
than 18 months after the Effective Date, all options will be vested.
Definitions of certain capitalized terms used in this Section 3.3 are set
forth in Section 7.1.
3.4 Benefits. During the period of her employment, Executive shall be
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entitled to participate in Employer's plans for the welfare and benefit of its
employees available to senior executive officers (including health, disability,
and life insurance programs, retirement plans, deferred compensation
arrangements, and vacation periods) as shall be established and modified from
time to time.
3.5 Expenses. During the term of this Agreement, Employer authorizes
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Executive to incur reasonable and necessary out-of-pocket expenses in the course
of performing her duties and rendering services hereunder in accordance with
Employer's policies with respect thereto, and Employer shall reimburse Executive
for all such expenses, provided (i) such expenses and the purpose for which they
were incurred are in accordance with Employer's policies, and (ii) Executive
timely submits to the Employer expense reports and substantiation of the
expenses in accordance with Employer's policies.
3.6 Relocation. Executive agrees to relocate to the Boston,
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Massachusetts metropolitan area within a reasonable time after the Effective
Date. Employer will reimburse reasonable and documented costs of sale of
Executive's existing residence (including real estate commissions), closing
costs of purchase of a new residence (including real estate commissions to the
extent payable by Executive as the buyer), costs of two trips to the Boston area
to search for a new residence, and moving costs.
4. Termination.
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4.1 Termination. Executive's employment by Employer shall terminate on
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the earliest Date of Termination upon the occurrence of any of the following
events:
4.1.1 Executive's death.
4.1.2 Executive is determined to be "permanently disabled" as defined
under the disability insurance policy covering Executive, as of the date that
benefits commence being paid.
4.1.3 Termination of Executive by Employer for Cause, provided, however,
that the Board of Directors has given Executive 30 days' written notice of its
intention to terminate Executive for Cause, specifying with particularity the
grounds on which the proposed termination for Cause is contemplated, which shall
be acts or failures to act on the part of Executive of which the Board first had
knowledge no more than six months prior to the giving of such notice. The Board
of Directors shall, on or before the expiration of the 30 day notice period,
consider whether the Cause specified in the notice has been cured by Executive.
Whether any such cure is possible and, if possible, has been effected, shall be
determined by the Board of Directors in their sole judgment.
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4.1.4 Termination of employment by Executive upon 30 days' written notice
to Employer because of Constructive Termination Without Cause.
4.1.5 Resignation by Executive, which shall be upon 30 days' written
notice to Employer.
4.1.6 Termination of Executive by Employer without Cause.
4.2 Time of Termination. Executive's employment with Employer (including
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all positions held with Employer or its Subsidiaries or affiliates) shall
terminate immediately upon the Date of Termination without further action by
Employer.
4.3 Effect of Termination of Employment.
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(a) Termination Due to Death. In the event that Executive's employment
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is terminated due to death, her estate or designated beneficiaries shall be
entitled to the following:
(i) continuation of installments of the Base Salary Amount in
effect as of the date of death for a period of six months following
the date of death, payable on Employer's standard payroll cycle;
(ii) on account of the bonus to which Executive is entitled under
Section 3.2(a) , an amount equal to the amount earned by the
Executive as of the Date of Termination, pro rated for the portion
of the calendar year elapsed prior to the Date of Termination, and
payable on the date it would otherwise have been payable;
(iii) the bonus payable under Section 3.2(b), if earned and unpaid
as of the Date of Termination;
(iv) the right to exercise any stock option held by Executive
which is then exercisable (other than any option qualified as an
incentive stock option under the Internal Revenue Code (an "ISO"))
on the date of death for the remainder of its term;
(v) any other amounts payable on death pursuant to any written
plans or policies of Employer; and
(vi) any other amounts that accrued and became due and payable
prior to termination but have not yet been paid from Employer to
Executive.
(b) Termination Due to Disability. In the event that Executive's
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employment is terminated due to permanent or total disability, Executive or
her legal representative shall be entitled to the following:
(i) on account of the bonus to which Executive is entitled under
Section 3.2(a) , an amount equal to the amount earned by the
Executive as of the Date of Termination, pro rated for the portion
of the calendar year elapsed prior to the Date of Termination, and
payable on the date it would otherwise have been payable;
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(ii) the bonus payable under Section 3.2(b), if earned and unpaid
as of the Date of Termination;
(iii) the right to exercise any stock option held by Executive
which is then exercisable (other than any ISO) on the Date of
Termination for the remainder of its term;
(iv) continuation of medical benefits and life insurance as
provided in Section 3.4 of this Agreement for so long as such
continuation may be provided at reasonable cost to Employer under
its insurance arrangements in effect from time to time (provided
that if Executive accepts employment with another employer that
offers medical and/or life insurance benefits, then Employer's
obligation to provide such benefits under this clause shall
terminate upon 30 days' notice from Employer to Executive);
(v) any other amounts payable according to Employer's disability
policies; provided that disability payments that would be funded by
insurance on the date hereof shall be made to the extent that funds
are available under insurance policies maintained by Employer which
are then in effect;
(vi) any other amounts that accrued and became due and payable
prior to termination but have not yet been paid from Employer to
Executive
(c) Termination without Cause or Constructive Termination Without Cause.
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In the event of termination by Employer without Cause (other than by death
or disability) or if there is a Constructive Termination Without Cause,
Executive shall be entitled to the following:
(i) continuation of installments of the Base Salary Amount in
effect as of the Date of Termination for a period of six months
following the Date of Termination, payable on Employer's standard
payroll cycle;
(ii) on account of the bonus to which Executive is entitled under
Section 3.2(a), an amount equal to the amount earned by Executive as
of the Date of Termination, pro rated for the portion of the
calendar year elapsed prior to the Date of Termination, and payable
on the date it would otherwise have been payable;
(iii) the bonus payable under Section 3.2(b), if earned and unpaid
as of the Date of Termination;
(iv) the right to exercise any stock option held by Executive
which is then exercisable (other than any ISO) on the Date of
Termination for the remainder of its term;
(v) continuation for six months of medical benefits and life
insurance as provided in Section 3.4 of this Agreement and
participation in other welfare benefit plans (provided that if
within such period Executive accepts employment with another
employer that offers medical and/or life insurance benefits, then
Employer's obligation to provide such benefits under this clause
shall terminate); and
(vi) any other amounts that accrued and became due and payable
prior to termination but have not yet been paid from Employer to
Executive
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(d) Termination for Cause or Resignation. In the event Executive's
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employment is terminated by Employer for Cause or by Executive by
Resignation (but not upon Constructive Termination Without Cause), Executive
shall receive:
(i) Base Salary Amount in effect on, and payable through, the
Date of Termination in accordance with Employer's standard payroll
policies; and
(ii) any other amounts that accrued and became due and payable
prior to termination but have not yet been paid from Employer to
Executive.
(e) Termination due to Expiration of Term. In the event Employer elects
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to not renew Executive's employment at the expiration of the Initial Term
or any Renewal Term, Executive shall receive:
(i) continuation of installments of the Base Salary Amount in
effect as of the Date of Termination for a period of six months
following the Date of Termination, payable on Employer's standard
payroll cycle;
(ii) on account of the bonus to which Executive is entitled under
Section 3.2(a), an amount equal to the amount earned by the
Executive as of the Date of Termination, pro rated for the portion
of the calendar year elapsed prior to the Date of Termination, and
payable on the date it would otherwise have been payable;
(iii) the right to exercise any stock option held by Executive
which is then exercisable (other than any ISO) on the Date of
Termination for the remainder of its term;
(iv) continuation for six months of medical benefits and life
insurance as provided in Section 3.4 of this Agreement and
participation in other welfare benefit plans (provided that if
within such period the Executive accepts employment with another
employer that offers medical and/or life insurance benefits, then
the Employer's obligation to provide such benefits under this clause
shall terminate); and
(v) any other amounts that accrued and became due and payable
prior to termination but have not yet been paid from Employer to
Executive.
5. Return of Employer's Property.
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Immediately upon termination of the Executive's employment with the
Employer, the Executive shall deliver to the Employer all confidential
information of the Employer, including, but not limited to, documents,
correspondence, notebooks, reports, computer programs, names of full-time and
part-time employees and consultants, and all other materials and copies thereof
(including computer discs and other electronic media) relating in any way to the
business of the employer in any way obtained by the Executive during the period
of her employment with Employer. Immediately upon termination of Executive's
employment with Employer, Executive shall deliver to Employer all tangible
property of Employer in the possession of Executive. The obligations of
Executive under this Section 5 shall survive the termination of Executive's
employment and the expiration or termination of this Agreement.
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6. Remedies.
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In the event of any breach or threatened breach, the parties to this
Agreement may pursue any and all remedies available at law or in equity for any
such breach or threatened breach, including the recovery of damages. Executive
shall be under no obligation to mitigate any damages suffered by Executive and
arising in connection with this Agreement, nor (except as provided in Sections
4.3 (c)(v) and 4.3 (e)(iv)) shall any income or amounts payable to Executive
other than pursuant to this Agreement offset damages hereunder. No payment due
Executive under this Agreement shall be subject to any discount based on
accelerated payment or otherwise. Costs of litigation, including, without
limitation, costs of investigations, fees and expenses of attorneys, shall be
borne by Executive (i) if Executive or her estate or beneficiaries shall
actually receive bonus payments or payments of Base Salary (as the case may be)
and medical, life insurance and welfare benefits pursuant to Section 4.3 in the
amounts and on the dates set forth therein (ii) if Executive shall have
resigned or (iii) if Executive shall have been terminated for Cause (provided
that if a court of competent jurisdiction shall determine that Cause did not
exist, then such costs of litigation shall be repaid to Executive). In other
cases such costs of litigation shall be borne by Employer. Each party to this
Agreement acknowledges that Employer would be irreparably harmed by any breach
of Section 5 and that damages alone would be an inadequate remedy for any breach
of such Section. Accordingly, Employer shall be entitled to equitable relief,
including without limitation a preliminary and/or permanent injunction for
specific performance, with respect to any such breach, without requirement of
the posting of a bond or other surety.
7. Miscellaneous.
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7.1 Certain Definitions.
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(a) "Cause" shall mean (i) breach of this Agreement or any other
agreement between Executive and Employer, (ii) willful refusal to perform
assigned duties, (iii) fraud, (iv) willful injury or attempt to do injury
to Employer, its assets or its business, (v) substance abuse or (vi) any
act that is a felony or any violation of laws or policies relating to
harassment or discrimination.
(b) "Constructive Termination Without Cause" shall mean:
(i) Executive shall have ceased to be the Chief Executive Officer
of Employer, Executive shall have been assigned to duties which are
inconsistent with her position as Chief Executive Officer or
limitations shall have been imposed on Executive's authority that
are inconsistent with her position as Chief Executive Officer, in
each case without Executive's prior written consent, whether as a
result of a transaction after the date hereof (including without
limitation a merger, reorganization, consolidation or similar
transaction) or otherwise;
(ii) The General Electric Company or Siemens, A.G. shall have
acquired effective control of the management of Employer;
(iii) without Executive's prior written consent, there shall have
been a reduction in Executive's then current Base Salary Amount or a
reduction in Executive's target award opportunity (if any) or other
long-term performance incentive which is
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proportionately greater than corresponding reductions in base
salary, target award opportunities or long term performance
incentives (as the case may be) for senior management generally, or
Employer shall have terminated or failed to continue to provide to
Executive any employee benefit then otherwise provided to Employer's
senior management generally, or Employer shall have failed to
include Executive in any incentive compensation plan of Employer
unless a plan providing substantially the same opportunity is
substituted;
(iv) Employer shall engage in fraudulent conduct in which
Executive is not a participant;
(v) Employer shall materially breach this Agreement and shall not
cure such breach within thirty days after written notice of such
breach is given by Executive to the Board of Directors of Employer,
including, without limitation, by failing to obtain the confirmation
or assumption of Employer's obligations under this Agreement as
required by Section 7.5 with respect to any transaction referred to
in that Section; or
(vi) Employer shall require that Executive relocate to a principal
place of business outside of the Boston, Massachusetts metropolitan
area.
(c) "Date of Termination" shall mean:
(i) if employment terminates because of Executive's death, the
date of death;
(ii) if employment terminates for "Cause", the expiration of the
30 day notice period under Section 4.1.3;
(iii) if employment terminates due to "Resignation", then the
earlier of Executive's last day of employment or 30 days from the
receipt by Employer of notice of such Resignation;
(iv) if employment terminates because of permanent or total
disability, the date of determination that Executive is disabled as
described in Section 4.1.2 of this Agreement;
(v) if employment terminates for Constructive Termination Without
Cause, on the date set forth in Executive's notice as described in
Section 4.1.4 of this Agreement; or
(vi) if employment terminates due to expiration of term, the date
of expiration.
(d) "Change in Control" means (i) a merger, liquidation, consolidation
or transfer of all or substantially all assets (other than a transaction in
which a majority of the aggregate voting power of the capital stock of
Employer or its successor immediately after the transaction is held by
holders who, in the aggregate, held a majority of the voting power of the
capital stock of Employer immediately before the transaction, calculated in
all cases on a fully diluted basis), or (ii) any other transaction or
series of related transactions that results in the acquisition by any
person or group of beneficial ownership
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of securities of Employer representing a majority of the aggregate voting
power of the capital stock of Employer (calculated in all cases on a fully
diluted basis); provided that the acquisition of additional securities by
any person or group that had beneficial ownership, on January 21, 1999, of
securities representing 10% or more of the aggregate voting power of the
capital stock of Employer, shall not be a Change in Control. The terms
"group" and "beneficial ownership" shall have the same meanings as under
the Rules and Regulations of the United States Securities and Exchange
Commission promulgated under the Securities Exchange Act of 1934.
(e) "Effective Date" means the date on which Executive commences
performance of her duties for Employer. Executive shall commence
performance not more than one month after the date of this Agreement.
(f) The "Fair Market Value" of a share of Employer's common stock means
the closing price per share of the common stock on the principal national
securities exchange on which the common stock is then listed or admitted to
trading or, if not then listed or admitted to trading on any such exchange,
on the Nasdaq National Market, or if not then listed or traded on any such
exchange or system, the average of the bid and offer price per share on
Nasdaq, in each case averaged over the ten trading days consisting of the
day as of which the current fair market value of the common stock is being
determined and the nine consecutive business days prior to such day. If at
any time such quotations are not available, the Fair Market Value of a
share of common stock shall mean the highest price per share that Employer
could obtain from a willing buyer (not a current employee or director) for
common stock sold by Employer, as determined in good faith by Employer,
unless Employer shall become subject to a merger, acquisition or other
consolidation pursuant to which Employer is not the surviving party, in
which case the Fair Market Value of a share of common stock shall mean the
value received by the holders of Employer's common stock for each share of
common stock in such transaction.
(g) "Option Value" means, at any time, the excess of the aggregate Fair
Market Value of the Employer common stock subject to options held by
Executive and vested at such time over the aggregate exercise price of such
options.
7.2 Notices. Any notices under this Agreement shall be in writing and
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shall be given by personal delivery, by local courier service, by certified or
registered letter, return receipt requested, or by a nationally recognized
overnight delivery service; and shall be deemed given when delivered in person
or by local courier or upon actual receipt of the facsimile or certified or
registered letter, or on the business day next following delivery to a
nationally recognized overnight delivery service at the addresses set forth
below or to such other address or addresses as either party shall have specified
in writing to the other party hereto.
If to the Employer:
eMed Technologies Corporation
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: Secretary
If to Executive:
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▇▇▇▇▇ ▇▇▇▇▇
W. 303 N. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7.3 Governing Law. All questions pertaining to the validity,
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construction, execution and performance of this Agreement shall be construed in
accordance with, and be governed by, the laws of the state of Massachusetts
without reference to its principles of conflicts of law.
7.4 Entire Agreement; Amendment or Modification. This Agreement, the
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Confidentiality and Work Product Agreement between Employer and Executive, the
Non-Competition Agreement between Employer and Executive and Employer's written
employment manuals and policies are all of the agreements of the parties hereto
relevant to the matters contained herein. No modification or amendment of any of
the provisions of this Agreement shall be effective unless in writing and signed
by Executive and Employer. No failure to exercise any right or remedy hereunder
shall operate as a waiver thereof. No term or condition of this Agreement shall
be deemed to have been waived, nor shall a party be estopped from enforcing any
provision of this Agreement, except by a statement in writing signed by
Executive or Employer, whichever party against whom such waiver or estoppel is
sought. If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable, such provision shall be
reformed to the extent necessary to make it valid or enforceable and to carry
out the intent of the parties, or if such reformation is not possible, the
remaining provisions of this Agreement shall continue in full force and effect.
7.5 Assignability; Binding Nature. This Agreement has been duly
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authorized by the Board of Directors of Employer and shall be binding upon and
inure to the benefit of the parties and their respective successors, heirs (in
the case of Executive) and permitted assigns. No rights or obligations of
Employer under this Agreement may be assigned or transferred by Employer, except
that such rights or obligations may be assigned or transferred pursuant to a
merger or consolidation in which Employer is not the continuing entity, or the
sale of all or substantially all of the assets of Employer, provided that the
assignee or transferee shall expressly assume the liabilities, obligations and
duties of Employer, as contained in this Agreement. If requested by Executive,
Employer will, prior to the effectiveness of any merger or consolidation of
Employer with or into any other entity or any sale of all or substantially all
of the assets of Employer, provide to Executive the express written assumption
of all of Employer's obligations hereunder by the surviving or successor entity
(or express written confirmation of such obligations if Employer is the
surviving entity). Executive may not assign any of his rights hereunder without
the prior written consent of Employer.
7.6 Survival. Executive's obligations under Sections 5 and 6 will
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survive the termination of Executive's employment and the termination of
expiration of this Agreement. Employer's obligations under this Agreement will
survive the termination of Executive's employment and the termination or
expiration of this Agreement until paid in full or satisfied.
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7.7 Headings. The paragraph and subparagraph headings contained in this
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Agreement are for reference purposes only and shall not affect the construction
or interpretation of this Agreement.
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7.8 Counterparts; Effectiveness. This Agreement may be executed in
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several counterparts, and all counterparts so executed shall constitute one
agreement, binding on the parties hereto, notwithstanding that both parties are
not signatory to the original or the same counterpart. This Agreement shall
become effective as of the date first set forth above when executed by Executive
and Employer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first above written, and will be effective for all purposes as of
the Effective Date.
eMed Technologies Corporation
By:
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Chairman of the Board
EXECUTIVE
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