EMPLOYMENT AGREEMENT
This Employment agreement ("Agreement") is entered into as of November
28, 1995, between Pixsys, Inc., d/b/a Image Guided Technologies, Inc., a
Colorado corporation (the "Company"), and Robert E. Silligman ("Silligman").
In consideration of the mutual covenants and conditions set forth
herein, the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby employs Silligman in the capacity
of President and Chief Operating Officer. Silligman accepts such employment and
agrees to perform such services as are customary to such office and as shall
from time to time be assigned to him by the Chairman of the Board or the Board
of Directors.
2. TERM. Subject to earlier termination as provided in Section 5,
the employment hereunder shall be for a period of two years, commencing on
November 28, 1995 (the "Commencement Date") and ending on November 30, 1997. At
the end of the two-year period (provided the Agreement has not been previously
terminated), the parties hereto shall consider, without any obligation to do so,
extending the Agreement for an additional one-year period. Silligman's
employment will be on a full-time basis requiring the devotion of such amount of
his productive time as is necessary for the efficient operation of the business
of the Company.
3. COMPENSATION AND BENEFITS.
3.1 SALARY. For the performance of Silligman's duties
hereunder, the Company shall pay Silligman an annual salary of $90,000, payable
(less required withholdings) no less frequently than twice monthly.
3.2 BENEFITS. Silligman shall be entitled to such medical,
disability and life insurance coverage and such vacation, sick leave and holiday
benefits, if any, as are made available to the Company's top executive
personnel, all in accordance with the Company's benefits program in effect from
time to time.
3.3 REIMBURSEMENT OF EXPENSES. Silligman shall be entitled to
be reimbursed for all reasonable expenses, including but not limited to expenses
for travel, meals and entertainment, incurred by Silligman in connection with
and reasonably related to the furtherance of the Company's business.
3.4 ANNUAL REVIEW. On each anniversary of the Commencement
Date, the Board of Directors will review Silligman's performance and
compensation hereunder (including salary, bonus and stock options and/or other
equity incentives) and will consider whether to increase such compensation, but
will not have authority, as the result of such review, to decrease any portion
of such compensation without the written consent of Silligman.
4. CHANGE OF CONTROL. In the event of a Change of Control of the
Company (as defined below), all options then granted to Silligman which are
unvested at the date of the Change of Control will be immediately vested. In
addition, in the event of a termination of Silligman's employment hereunder for
any reason (other than as set forth in Section 5.1(f)) following a Change of
Control, the Company will promptly pay Silligman, in addition to the amounts
required under Section 5.2(a), a lump sum severance amount payable immediately
upon such termination of employment, equal to one-half of his then annual
salary. This payout shall be in lieu of any amount which may otherwise be due
under Section 5.2(b).
As used herein, a "Change of Control" of the Company shall be deemed
to have occurred:
(a) Upon the consummation, in one transaction or a series of related
transactions, of the sale or other transfer of voting power (including voting
power exercisable on a contingent or deferred basis as well as immediately
exercisable voting power) representing effective control of the Company to a
person or group of related persons who, on the date of this Agreement, is not
affiliated (within the meaning of the Securities Act of 1933) with the Company,
whether such sale or transfer results from a tender offer or otherwise; or
(b) Upon the consummation of a merger or consolidation in which the
Company is a constituent corporation and in which the Company's shareholders
immediately prior thereto will beneficially own, immediately thereafter,
securities of the Company or any surviving or new corporation resulting
therefrom having less than a majority of the voting power of the Company or any
such surviving or new corporation; or
(c) Upon the consummation of a sale, lease, exchange or other
transfer or disposition by the Company of all or substantially all its assets to
any person or group of related persons.
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5. TERMINATION.
5.1 TERMINATION EVENTS. The employment hereunder will terminate
upon the occurrence of any of the following events:
(a) Silligman dies;
(b) The Company, by written notice to Silligman or his personal
representative, discharges Silligman due to the inability to perform the duties
assigned to him hereunder for a continuous period exceeding 90 days by reason of
injury, physical or mental illness or other disability, which condition has been
certified by a physician; provided, however, that prior to discharging Silligman
due to such disability, the Company shall give a written statement of findings
to Silligman or his personal representative setting forth specifically the
nature of the disability and the resulting performance failures, and Silligman
shall have a period of ten (10) days thereafter to respond in writing to the
Board of Directors' findings;
(c) Silligman is discharged by the Board of Directors of the
Company for cause. As used in this Agreement, the term "cause" shall mean:
(i) Silligman's conviction of (or pleading guilty or NOLO
CONTENDERE to) a felony or any misdemeanor involving dishonesty or moral
turpitude; or
(ii) (a) The willful and continued failure of Silligman to
substantially perform his duties with the Company (other than any such failure
resulting from illness or disability) after a demand for substantial performance
is requested by the Company's Board of Directors, which specifically identifies
the manner in which it is claimed Silligman has not substantially performed his
duties, or (b) Silligman is willfully engaged in misconduct which has a direct
and material adverse monetary affect on the Company. For purposes of this
subpart (ii) no act or failure to act on Silligman's part shall be considered
"willful" unless done, or omitted to be done, by Silligman not in good faith and
without reasonable belief that Silligman's action or omission was in the best
interest of the Company. No termination shall be effected for cause pursuant to
this subpart (ii) unless Silligman has been provided with specific information
as to the acts or omissions which form the basis of the allegation of cause, and
Silligman has had an opportunity to be heard, with counsel if he so desired,
before the Board of Directors and such Board determines in good faith that
Silligman was guilty of conduct constituting "cause" as herein defined,
specifying the particulars thereof in detail;
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(d) Silligman is discharged by the Board of Directors of the
Company without cause, which the Company may do at any time upon notice to
Silligman;
(e) Silligman voluntarily terminates his employment due to
either (i) a default by the Company in the performance of any of its obligations
hereunder, or (ii) an Adverse Change in Duties (as defined below), which default
or Adverse Change in Duties remains unremedied by the Company for a period of
ten days following its receipt of written notice thereof from Silligman; or
(f) Silligman voluntarily terminates his employment for any
reason other than the Company's default or an Adverse Change in Duties, which
Silligman may do at any time with at least 30 days advance notice.
As used herein, "Adverse Change in Duties" means an action or series
of actions taken by the Company, without Silligman's prior written consent,
which results in:
(1) A change in Silligman's reporting responsibilities, titles,
job responsibilities or offices which, in Silligman's reasonable judgment,
results in a diminution of his status, control or authority; or
(2) The assignment to Silligman of any positions, duties or
responsibilities which, in Silligman's reasonable judgment, are inconsistent
with Silligman's positions, duties and responsibilities or status with the
Company;
(3) A requirement by the Company that Silligman be based or
perform his duties anywhere other than (i) at the Company's corporate office
location on the date of this Agreement, or (ii) if the Company's corporate
office location is moved after the date of this Agreement, at a new location
that is no more than 60 miles from such prior location; or
(4) A failure by the Company (i) to continue in effect any
material benefit, whether or not qualified, or other compensation, bonus or
incentive plan in effect on the date of this Agreement or subsequently adopted,
or (ii) to continue Silligman's participation in such benefits or plans at the
same level or to the same extent as on the Commencement Date or, with respect to
subsequently adopted benefits or plans, on the date of initial implementation
thereof, or (iii) to provide for Silligman's participation in any newly adopted
benefits or plans at a level or to an extent commensurate, in Silligman's
reasonable judgment, with that of other top executives of the Company.
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5.2 EFFECTS OF TERMINATION.
(a) Upon termination of Silligman's employment hereunder for any
reason, the Company will promptly pay Silligman all compensation owed to
Silligman and unpaid through the date of termination (including, without
limitation, salary and employee expense reimbursements).
(b) In addition (except in a situation where severance is due
pursuant to Section 4), if Silligman's employment is terminated under Sections
5.1(a), (b), (d) or (e), the Company shall also pay Silligman, immediately upon
such termination of employment, a lump sum severance amount equal to one-half of
his then annual salary.
(c) Upon termination of Silligman's employment hereunder for any
reason, Silligman agrees that for the six (6) month period following the
Termination Event:
(i) Silligman will not directly or indirectly, whether for
his own account or as an individual, employee, director, consultant or advisor,
or in any other capacity whatsoever, provide services to any person, firm,
corporation or other business enterprise which is involved in the design,
development or marketing of optical digitizers or image guided products unless
he obtains the prior written consent of the Board of Directors.
(ii) Silligman will not directly or indirectly encourage or
solicit, or attempt to encourage or solicit, any individual to leave the
Company's employ for any reason or interfere in any other manner with the
employment relationships at the time existing between the Company and its
current or prospective employees.
(iii) Silligman will not induce or attempt to induce any
customer, supplier, distributor, licensee or other business relation of the
Company to cease doing business with the Company or in any way interfere with
the existing business relationship between any such customer, supplier,
distributor, licensee or other business relation and the Company.
Silligman acknowledges that monetary damages may not be sufficient to
compensate the Company for any economic loss which may be incurred by reason of
breach of the foregoing restrictive covenants. Accordingly, in the event of any
such breach, the Company shall, in addition to any remedies available to the
Company at law, be entitled to obtain equitable relief in the form of an
injunction precluding Silligman from continuing to engage in such breach.
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If any restriction set forth in this paragraph is held to be
unreasonable, then Silligman and the Company agree, and hereby submit, to the
reduction and limitation of such prohibition to such area or period as shall be
deemed reasonable.
6. GENERAL PROVISIONS.
6.1 ASSIGNMENT. Neither party may assign or delegate any of his
rights or obligations under this Agreement without the prior written consent of
the other party, except that the Company may assign its rights and obligations
hereunder to a successor by merger or an assignee of all or substantially all of
the Company's assets.
6.2 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes any and all prior agreements between the parties relating to such
subject matter.
6.3 MODIFICATIONS. This Agreement may be changed or modified
only by an agreement in writing signed by both parties hereto.
6.4 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall inure to the benefit of, and be binding upon, the Company and its
successors and assigns and Silligman and Silligman's legal representatives,
heirs, legatees, distributees, assigns and transferees by operation of law,
whether or not any such person shall have become a party to this Agreement and
have agreed in writing to join and be bound by the terms and conditions hereof.
6.5 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of Colorado.
6.6 SEVERABILITY. If any provision of the Agreement is held by
a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect.
6.7 FURTHER ASSURANCES; COMMITTEES OF BOARD. The parties will
execute such further instruments and take such further actions as may be
reasonably necessary to carry out the intent of this Agreement. The term "Board
of Directors" shall include any committee of the Board.
6.8 NOTICES. Any notices or other communications required or
permitted hereunder shall be in writing and shall be deemed received by the
recipient when delivered personally or, if mailed, five (5) days after the date
of deposit in the United
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States mail, certified or registered, postage prepaid and addressed, in the case
of the Company, to 5680 Central Avenue, Suite B, Boulder, CO 80301, and in the
case of Silligman, to the address shown for Silligman on the signature page
hereof, or to such other address as either party may later specify by at least
ten (10) days advance written notice delivered to the other party in accordance
herewith.
6.9 NO WAIVER. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver of that
provision, nor prevent that party thereafter from enforcing that provision or
any other provision of this Agreement.
6.10 LEGAL FEES AND EXPENSES. In the event of any disputes
under this Agreement, each party shall be responsible for their own legal fees
and expenses which it may incur in resolving such dispute.
6.11 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and Silligman have executed this
Agreement effective as of the date first above written.
COMPANY SILLIGMAN
Pixsys, Inc., d/b/a
Image Guided Technologies, Inc.
By:/S/ PAUL L. RAY /S/ ROBERT E. SILLIGMAN
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Paul L. Ray Robert E. Silligman
President Address: 2354 E. Terrace Drive
Highlands Ranch, CO 80126
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