EMPLOYMENT AGREEMENT
EX- 10.22
This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
this 14th day of September, 1995, by and between PRIMEDEX HEALTH SYSTEMS, INC.,
a New York corporation qualified to do business in California ("Employer"), with
its principal place of business at 1516 Cotner Avenue, Los Angeles, California
90025 and STEVEN R. HIRSCHTICK, an individual ("Employee") residing at 6301
Vista del Mar, Playa del Rey, California 90293.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and intending to be legally bound hereby, the parties hereto agree as follows:
1. Employment. Employer hereby agrees to employ Employee as General Counsel
and Senior Vice President of Employer. In that capacity, Employee shall perform
such duties as are typical or appropriate in his capacities of employment,
subject to and under the direction of Employer's Board of Directors. In
addition, Employee shall perform such other duties for Employer as Employer may
reasonably request, or as may be necessary or desirable in performing or
carrying out the intention of this Agreement. Employee shall provide such
services for, and consult with and advise, without additional compensation,
corporations affiliated with Employer as Employer may from time-to-time
reasonably specify. Notwithstanding the foregoing, Employer may not require
Employee to relocate outside of Los Angeles County without Employee's prior
written consent, given in his sole discretion.
2. Employment Term. The term of this Agreement shall begin November 1, 1995
and end October 31, 2000 unless earlier terminated in accordance with Section 10
hereof (the "Employment Term").
3. Extent of Service. Employee shall use his best efforts to fulfill his
duties in the course of his employment and to further the business of Employer
while devoting his full professional time, attention and energy during regular
business hours to the business and affairs, and to prompting the interests and
welfare, of Employer and its affiliates (any person or entity now or hereafter
controlling, controlled by, or under common control with Employer being herein
referred to as an "affiliate"). Employee shall be subject to the direction aid
control of the Board of Directors of Employer. Employee shall not work for any
other business or enterprise during the Employment Term if such other work would
materially impair Employee's duties hereunder.
4. Compensation.
a. Base Salary. For the services rendered by Employee hereunder,
Employer shall pay Employee a base salary at the annual rate of Two Hundred
Seventy-Five Thousand Dollars ($275,000) less withholding required by law or
agreed to by Employer and Employee. Such rate shall be reviewed annually.
Employee understands and agrees that Employer is under no obligation to increase
Employee's annual base salary as a result of such review. Such salary shall be
payable in installments at such times as Employer customarily pays its other
employees holding comparable positions (but in any event not less often than
monthly). The annual amount payable to Employee pursuant to the provisions of
this Section 4(a) shall sometimes hereinafter be referred to as "Base Salary."
b. Bonus. Employee shall participate in any bonus plan or bonus pool
applicable to senior management of Employer and/or Employer's affiliates, and/or
may receive an individual bonus outside of any such plan in the sole discretion
of Employer's Chief Executive Officer, as authorized by the Employer's Board of
Directors.
c. Fringe Benefits. In addition to the other benefits provided for
hereunder, Employee shall be entitled to the following benefits, such benefits
to be provided by Employer:
i. Four (4) weeks of paid vacation each year (prorated for any
portion thereof).
ii. Sick time, employee benefit plan participation and
hospitalization, medical and dental insurance coverage under such health plans
as may be maintained by Employer from time to time, if any, all in accordance
with Employer's standard policies and practice; provided, however, that
hospitalization, medical and dental coverage shall be funded by Employer on the
same basis as Employer funds health insurance coverage of other senior executive
employees of the Company; and
iii.Such other usual and customary fringe benefits as may be
allowed to similarly situated senior executive employees of Employer, including
but not limited to life insurance and use of a company car.
d. Stock Options. Employee has been granted options to purchase up to
400,000 shares of Common Stock, $.01 par value per share, of Employer, which
options shall be granted to Employee in accordance with the terms of a Stock
Option Agreement executed concurrently herewith and which options shall be
exercisable in accordance with the terms and conditions of that agreement.
e. Prior Stock Options. Under two Stock Option Agreements both dated as
of October 15, 1993, Employee had options to purchase 800,000 shares of
Employer's common stock. Said two Stock Option Agreements dated as of October
15, 1993 are hereby terminated.
f. Effect of Termination.
i. Upon Employee's voluntary termination or termination under
Section 10 (except pursuant to Section 10(d)) hereof, Employee's rights under
Section 4(a) shall immediately cease. This provision shall not apply to salary
or payments or benefits accrued prior to such termination.
ii. Upon Employee's voluntary termination or termination under
Section 10 (except pursuant, to Section 10(d)) hereof, Employee's right to any
and all fringe benefits described in Section 4(c) shall immediately cease. This
provision shall not apply to any accrued and vested vacation pay.
Notwithstanding the foregoing, Employer will fulfill all of its obligations
under law with respect to the continuation of health benefits.
5. Business Expenses. Employer will reimburse Employee for all ordinary and
reasonable out-of-pocket business expenses incurred by Employee in continuation
with his performance of services hereunder the Employment Term in accordance
with Employer's expenses approval procedures then in effect.
6. Inventions, Designs and Product Developments. All inventions,
innovations, designs, processes, programs, techniques, assemblies of
information, ideas and product developments developed or conceived by employee,
solely or jointly with others, whether or not patentable or copyrightable, at
any time during the Employment Term and that relate to the actual or planned
business activities of Employer or its affiliates or to similar business
activities (collectively, the "Developments") and all of Employee's right, title
and interest therein, shall be the exclusive property of Employer. Employee
hereby assigns, transfers and conveys to Employer all of his right, title and
interest in and to any and all such Developments. Employee shall disclose fully,
as soon as practicable and in writing, all Developments to the Board of
Directors of Employer. Employee agrees to preserve as confidential full
particulars of any matters referred to herein, and to maintain at all times
adequate current written records of all such matters which records shall be and
shall remain the property of Employer. At any time and from time to time, upon
the request of Employer, Employee shall execute and deliver to Employer any and
all instruments,
2
documents and papers, give evidence and do any and all other acts that, in the
opinion of counsel for Employer, are or may be necessary or desirable to
document such transfer or to enable Employer to file and prosecute applications
for and to acquire, maintain and enforce any and all patents, trademark
registrations or copyrights under United Sates or foreign law with respect to
any Developments or to obtain any extension, validations, reissue, continuance
or renewal of any such patent, trademark or copyright. Employer will be
responsible for the preparation of any such instruments, documents and papers
and for the prosecution of any such proceedings and will reimburse Employee for
all reasonable expenses incurred by him in compliance with the provisions of
this Section 6. By his signature hereon, Employee acknowledges that he has been
notified and understands that this provision, shall not apply to any of the
foregoing for which no equipment, supplies, facility or trade secret information
of Employer was used and which was developed entirely on Employee's own time,
and (a) which does not relate to the business of Employer or to Employer's
actual or demonstrably anticipated research or development, or (b) which does
not result from any work performed by Employee or Employer.
7. Confidential Information. Employee acknowledges that, by reason of his
employment by and service to Employer, he will have access to confidential
information of Employer (and it affiliates) including, without limitation,
information and knowledge pertaining to products, present and future
developments, techniques, programs, trade secrets, services marketing
strategies, processes, patents, copyrights, trademarks, policies, contracts,
personnel information, improvements, methods of operation, sales and profits
figures, customer and client lists, relationships between Employer and those
persons, entities and affiliates with which Employer has contracted and others
who have business dealings with it and other confidential property and
information of Employer and its customers (collectively, the "Confidential
Information"). Employee acknowledges that the Confidential Information is a
valuable and unique asset of Employer and covenants that, both during and after
the Employment Term, he will not disclose any Confidential Information to any
person, firm or corporation (except as his duties as an employee of Employer may
require) without the prior written authorization of the Board of Directors of
Employer and that all such matters and properties shall be and shall remain the
property of Employer and/or its customers. The obligation of confidentiality
imposed by his Section 7 shall not apply to information that appears and in
issued patents that is required by governmental authorities to be disclosed or
that otherwise becomes generally known in the industry through no act of
Employee in breach of this Agreement.
8. Noncompetition.
a. Covenant of Employee. Employee acknowledges that he has specialized
knowledge and experience in Employer's business, that his reputation and
contracts within the industry are considered of great value to Employer and that
if his knowledge, experience, reputation or contacts are used to compete
accordingly agrees that for a period of one (1) year following the termination
of Employee's employment hereunder, Employee shall not (except as his duties as
an employee of Employer may require), without the prior written consent of the
Board of Directors of Employer, directly or indirectly:
i. Contract or solicit for the purpose of engaging in the business
of the same general character as then engaged in by Employer, or divulge to any
person, firm or corporation the name, address or requirements of, or perform
services of the same general character as those performed by Employer for, any
person, firm, corporation or other entity who is or at any time during the two
(2) years preceding the date of this Agreement had been, a customer of Employer;
ii. Solicit for employment any of the employees, agents or
representatives of Employer;
3
iii.Own, manage, operate, finance, join, control or participate in
the ownership, management, operation, financing or control of, or be connected
as an officer, director, employee, partner, principal, agent, representative,
consultant or otherwise with any business or enterprise, whether in corporate,
proprietorship or partnership form or otherwise, engaged in the business of the
same character as that then engaged in by the Employer in those cities or
counties of the State of California (the "Prohibited Territory"), including the
carrying on of a business which may be located elsewhere but which involves
sales or any activity within the Prohibited Territory; or
iv. Use his name or permit his name to be used in connection with
any business or enterprises engaged in the business of the same character as
that then engaged in the business of the same character as that then engaged in
by Employer in the Prohibited Territory, including the carrying on of a business
which may be located elsewhere but which involves sales or any activity within
the stipulated city or county.
b. Exception. The provisions of this Section 8 shall not be construed
to prohibit the ownership by Employee of not more than 5% of any class of
securities of any corporation that has a class of securities registered pursuant
to the Securities and Exchange Act of 1934.
c. Practice of Law Exception. After termination of employment,
notwithstanding anything contained in this Agreement to the contrary, Employee
shall be entitled to engage in the unrestricted private practice of law either
in association with a law firm or as a sole practitioner.
d. Reformation. If the provisions of this Section 8 should ever be
adjudicated to exceed the time, geographic, service or product limitations
permitted by applicable law in any jurisdiction, then such provision shall be
deemed reformed in such jurisdiction to the maximum time, geographic, service or
product limitations permitted by applicable law.
e. Notice to Others. Employee agrees that until the expiration of the
covenants contained in this Section 8, he will provide, and that Employer may
similarly provide a copy of such covenants to any business or enterprise:
i. That he may directly or indirectly own, manage, operate,
finance, join, control or participate in the ownership, management, operation,
financing or control of; or
ii. With which he may be connected as an officer, director
employee, partner, principal, agent, representative, consultant or otherwise, or
in connection with which he may use his name or permit his name to be used.
9. Equitable Relief. Employee acknowledges that the restrictions contained
in Sections 6, 7 and 8 are, in view of the nature of the business of Employer,
reasonable and necessary to protect the legitimate interests of Employer, that
Employer would not have entered into this agreement in the absence of such
restrictions, and that any violation of any provisions of those Sections will
result in irreparable injury to Employer. Employee also acknowledges that the
remedy at law for any violation of these restrictions will be inadequate and
that Employer shall be entitled to temporary and permanent injunctive relief,
without the necessity of proving actual damages or the posting of a bond, and
that Employer shall be further entitled to an equitable accounting of all
earnings, profit; and other benefits arising from any such violation, which
rights shall be cumulative of and in addition to any other rights or remedies to
which Employer may be entitled. In the event of any such violation, Employer
shall be entitled to commence an action for temporary and-permanent injunctive
relief and other equitable relief in any court of Competent jurisdiction and
Employee further irrevocably submits to the jurisdiction of any court in the
jurisdiction of the United States District Court for the Central District of
California over any suit, action or proceeding arising out of or relating to
this Agreement. Employee hereby waives, to the fullest extent permitted by law,
any objection that he may now or hereafter have to such jurisdiction or to the
venue of any such suit, action or proceeding brought in such a court and any
claim that such suit, action or proceeding has been brought in an inconvenient
forum. Effective service of process may be made upon Employee by mail under the
notice provisions contained in Section 13.
4
10. Termination.
a. Death. If Employee dies during the Employment Term, this Agreement
shall terminate and thereafter Employer shall have no liability or obligation to
Employee, his heirs, personal representatives, assigns or any other person
claiming under or through him except for unpaid salary and benefits accrued to
the date of his death.
b. Employer's Cause. Upon the occurrence of any of the following
events, this Agreement may be terminated for cause by Employer giving written
notice of termination to Employee, such termination to be effective upon the
date specified in such notice:
i. Employee's conviction of, or plea of nolo contendere or its
equivalent with respect to, a felony involving fraud or dishonesty or any other
crime for which a term of imprisonment in excess of one (1) year could be
imposed; or
ii. Employee's material breach of any of the terms or conditions
of this Agreement which is not cured within ninety (90) days after receipt of
written notice from Employer to Employee.
c. Voluntary Termination and Severance Pay. Either party to this
Agreement may terminate this agreement at any time for any reason by giving the
other party at least thirty (30) days prior written notice of the effective date
of termination. In the event of such termination of this Agreement by either
Employer or Employee, Employer shall pay to Employee, in addition to any and all
other compensation due under this Agreement, an additional Two Hundred Thousand
Dollars ($200, 000). This amount shall be paid as a lump sum no later than the
effective date of any such termination.
d. Employee's Cause. This Agreement may be terminated for "cause" by
Employee upon giving written notice of termination to Employer, such termination
to be effective upon the date specified in such notice. For the purposes of this
Section 10(d), "cause" shall mean Employer's material breach of any of the terms
or conditions of this Agreement and the failure to cure such breach within
thirty (30) days after written notice from Employee to Employer. The severance
pay of Two Hundred Thousand Dollars ($200,000) (as set forth in 10(c) above)
plus an additional six (6) months Base Salary shall be paid to Employee on or
before the effective date of termination under this subparagraph 10(d).
e. Attorney-Client Privileges. Employer recognizes that Employee has
for some time prior to this Agreement been actively engaged in the private
practice of law for numerous clients in the same industry and many of the same
markets as Employer. Employer also recognizes and accepts that there is an
attorney-client privilege of the utmost confidentiality that is required with
respect to any confidential information that Employee had Previously received in
his capacity as an attorney. Nothing in this Agreement shall be construed to
require Employee to divulge any such information or utilize any such information
for the benefit of Employer. Employee's refusal to divulge and/or utilize any
such information shall not constitute any breach of this Agreement.
11. Survival. Notwithstanding the termination of this Agreement pursuant to
Section 10 or the expiration of the Employment Term, the obligations of Employee
under Sections 6, 7 and 8 shall survive and remain in full force and effect and
Employer shall be entitled to equitable relief against Employee pursuant to the
provisions of Section 9.
12. Indemnification. Employer shall indemnify and hold Employee harmless
from any and all expenses, including judgments, awards, and/or legal fees (with
an attorney of employee's choice) relating to any litigation or other legal
proceedings in which Employee is named as a party, provided that Employee is
named as a party in such litigation or other legal proceeding because of some
alleged act or activity alleged to have been conducted by Employee in any
capacity in which he is connected with Employer.
5
13. Notice. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be deemed to have been given when delivered by hand, sent by
recognized overnight delivery services such as Federal Express, or mailed by
registered or certified mail, return receipt requested, and shall be deemed to
be effective on the date delivered by hand, sent by recognized overnight
delivery service such as Federal Express, or mailed, as follows (provided that
notice of change of address shall be deemed given only when received): If to
Employer, at Employer's address provided on the first page of this Agreement. If
to Employee, at Employee's address provided on the first page of this Agreement;
and to such other names or addresses as Employer or Employee, as the case may
be, shall designate by notice to the other party in the manner specified in this
Section.
14. Governing Law. This Agreement shall be governed by and interpreted and
enforced in accordance with the substantive laws of the State of California
without reference to the principles governing the conflicts of laws applicable
in that or any other jurisdiction.
15. Contents of Agreement: Amendment and Assignment. This Agreement sets
forth the entire understanding between the parties hereto with respect to the
subject matter hereof and cannot be changed, modified or terminated except upon
written amendment or supplement duly executed by the parties hereto. All of the
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective heirs, personal representatives,
successors and assigns of the parties hereto, except that (a) the duties and
responsibilities of Employee hereunder are of a personal nature and shall not be
assignable in whole or in part by Employee and (b) the rights and interests of
Employee hereunder shall not be assignable in whole or in part by Employee.
16. Severability. If any provision of this Agreement or application thereof
to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement that can be given
effect without the invalid or unenforceable provisions or application and shall
not invalidate or render unenforceable such provision in any other jurisdiction
or under any other circumstance.
17. Remedies Cumulative; No Waiver. No remedy conferred upon Employer by
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given hereunder or now or hereafter existing at law or in equity. No
delay or omission by Employer in exercising any right, remedy or power hereunder
or existing at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by Employer from time to time and
as often as may be deemed expedient or necessary by Employer in its sole
discretion.
18. Arbitration. Except as provided in Section 9 hereof, any dispute or
controversy arising from or relating to this Agreement shall be decided by
arbitration in the County of Los Angeles, State of California, in accordance
with the commercial rules and regulations of the American Arbitration
Association and in accordance with the discovery procedures set forth in the
California Discovery Act. Such decision shall be final and binding upon the
parties. At the request of either Employer or Employee, arbitration proceedings
shall be conducted in the utmost secrecy, and, in such case, all documents,
testimony and records shall be received, heard and maintained by the arbitrator
in secrecy, available for inspection only by Employer or Employee and their
respective attorneys and experts who shall agree, in advance and in writing, to
receive all such information confidentially and to maintain the secrecy of such
information shall become generally known.
19. Attorneys' Fees. The prevailing party shall be entitled to recover its
reasonable attorneys' fees and, costs incurred in connection with any action or
proceeding under this Agreement.
6
IN WITNESS WHEREOF, the undersigned have each duly executed this Agreement
as of the date first above written.
EMPLOYER:
PRIMEDEX HEALTH SYSTEMS, INC.
By: /s/ Herm Rosenman
Herm Rosenman
Its President and CEO
EMPLOYEE:
STEVEN R. HIRSCHTICK
/s/ Steven R. Hirschtick