Employment Agreement between Computerized Thermal Imaging, Inc. and Kevin L. Packard (CFO)

Summary

This agreement is between Computerized Thermal Imaging, Inc. and Kevin L. Packard, outlining the terms of his continued employment as Chief Financial Officer, Secretary, and Treasurer. It specifies his salary, benefits, and conditions for transitioning to a new role or part-time status if a replacement is hired or if he accepts another job. The agreement also covers stock options, benefit eligibility, and the process for voluntary or cause-based termination. The term is six months, with provisions for early termination by either party and specific vesting conditions for restricted stock.

EX-10.2 3 ctiex102.txt EMPLOYMENT AGREEMENT EXHIBIT 10.2 EMPLOYMENT AGREEMENT THIS AGREEMENT, effective as of February 1, 2001, between Computerized Thermal Imaging, Inc., a Nevada corporation (the "Company"), and Kevin L. Packard, an individual residing in Farmington, Utah (the "Employee") (hereinafter collectively, the "Parties"). RECITALS WHEREAS, the Employee has been advised that the Company is contemplating a relocation of its principal executive offices to Portland, Oregon; WHEREAS, in connection therewith, it is contemplated that the Company's Chief Financial Officer will be required to reside in Portland, Oregon; WHEREAS, the Employee does not wish to relocate his employment if such move occurs; WHEREAS, the Company values the continued employment of Employee during the term of this Agreement; WHEREAS, the Employee hereby relinquishes his ownership and all rights in those certain 100,000 incentive stock options granted to Employee as of May 23, 2000; and WHEREAS, the Employee hereby waives any claims (except for breach of this Agreement by the Company), if any, that Employee has now or which may arise in the future in connection with Employee's employment with and future retirement from the Company. NOW THEREFORE, the Company and Employee desire to restate and clarify the terms of continuing employment of the Employee during the term of this Agreement. WITNESSETH 1. Employment. The Company hereby employs the Employee, and Employee accepts such employment by the Company, upon all the terms and conditions hereinafter stated, and as subject to termination as provided in Section 4 hereof. Employee shall be employed as Chief Financial Officer, Secretary and Treasurer of the Company until the earlier of: 1) such time as a replacement for such offices is employed by the Company (the "Replacement"), or 2) until termination of Employee's employment with the Company. If a Replacement is employed by the Company prior to the termination of Employee's employment with the Company, Employee shall resign from his offices and duties as Chief Financial Officer, Secretary and Treasurer but shall continue to be employed by the Company thereafter in the capacity of Director of SEC Reporting. In any capacity of employment hereunder, Employee will report to the Chief Executive Officer of the Company in the performance of his duties. 2. Extent of Service. The Company relies upon Employee to devote sufficient time and energy to the business of the Company as is reasonably necessary to fulfill the spirit and purpose of this Agreement. During the term of this Agreement and for all time thereafter, Employee shall, in good faith, protect the good name and reputation of the Company and its officers and directors and shall make every reasonable and good faith effort, during the term of this Agreement, to retain and maintain the business relationships important to the Company. Employee shall not be prevented from making passive investments in other businesses or enterprises or from being employed by another company during the term of this Agreement, if (i) such other companies, businesses, or enterprises are not engaged in any business competitive with the business of the Company, and (ii) the Employee has complied with Section 8 of this Agreement with respect to such other employment or passive investment. It is specifically understood by the parties hereto that, during the term of this Agreement, the Employee shall be seeking, and may accept, an offer of employment from another company. It is further understood and agreed to by the parties hereto that the effectiveness of this Agreement shall survive the Employee's acceptance of employment with any other company. More specifically, notwithstanding any other provision of this Agreement and except for voluntary termination or termination for "Cause" as defined herein, the Employee's employment with the Company shall continue for a period of six months thereby allowing Employee's employment with the Company to continue for sufficient time to vest in the Restricted Stock granted pursuant to Section 3(c) herein. 3. Compensation. (a) Salary. (1) As payment for the services to be rendered during the term of this Agreement, Employee shall be entitled to receive a base salary of One Hundred Thirty Eight Thousand and No/100 Dollars ($138,000) per year until such time as a Replacement is employed by the Company. Thereafter, the Employee shall be entitled to receive a base salary of One Hundred Thousand and No/100 Dollars ($100,000) per year until such time, if any, that Employee accepts full-time employment with another company. Thereafter, Employee shall be employed on a part-time basis and shall be entitled to $50 per hour for services rendered. All compensation payable hereunder shall be paid in accordance with the payroll policies of the Company in effect from time to time. (b) Benefits. During the term of this Agreement, the Employee shall be entitled to participate in all employee benefit and insurance plans maintained from time to time by the Company for the benefit of its employees, in accordance with the policies of the Company in effect from time to time. Notwithstanding, this provision shall exclude Employee's participation in the Company's 401(k) plan and group-term life insurance plan effective upon the execution of this Agreement. The Company has previously paid for a $750,000 term life insurance policy for the benefit of the Employee. Such policy shall remain in effect during the term of the policy. Any future costs to maintain such policy shall be borne by Employee. The Employee shall continue to accrue vacation at the Employee's rate of accrual in effect on the effective date of this Agreement. All such benefit plans are subject to change or termination from time to time by Company in its sole and absolute discretion. (c) Restricted Stock. Employee shall receive, in addition to the salary and employee benefits specified in Section 3(a) and (b) above, Restricted Stock of the Company, as more fully described and subject to: (i) the conditions set forth in Exhibit A attached hereto and incorporated by reference herein and (ii) that certain 1997 Incentive Stock Plan (the "Plan") of the Company attached hereto as Exhibit B. (d) Registration Rights. The Company represents that all stock in the Company which Employee obtains from the vesting of Restricted Stock has been previously registered pursuant to a Form S-8 previously filed with the Securities and Exchange Commission. 4. Term; Termination. (a) The term of this Employment Agreement shall commence on the first date when Employee reports for work for the Company after the effective date hereof (the "Effective Date") and shall continue thereafter for a period of six (6) months, subject to the terms and conditions herein stated; provided that Employee may terminate this Agreement at any time hereafter by giving the Company at least fourteen (14) days' prior written notice. If Employee voluntarily terminates this Agreement, Company shall have no further financial liability to Employee beyond the effective date of such termination. (b) If during the term of this Agreement Employee is prevented for a continuous period of thirty (30) days from performing his duties hereunder by reason of physical or mental disability ("Disability"), then the Company, on seven days' prior written notice to the Employee, may terminate this Agreement. In the event of a termination pursuant to this paragraph 4(b), the Company shall be relieved of all of its obligations under this Agreement, except that: (i) the Company shall pay to the Employee that portion of the Employee's wages earned and accrued by Employee prior to Employee's termination, and (ii) to the extent provided in the Plan, Employee shall vest in the Restricted Stock described in Paragraph 3(c) hereof. (c) The Company may at any time discharge the Employee for Cause (as hereinafter defined) and terminate this Agreement without any further liability hereunder to the Employee or his spouse or estate, except for the obligation of the Company to pay the Employee's wages earned to the date of discharge. For purposes of this Agreement, the Company shall have "Cause" to terminate the Employee's employment upon (i) the gross negligence of the Employee in performing his duties hereunder (other than any such failure resulting from the Employee's incapacity due to physical or mental illness), (ii) the willful engaging by the Employee in conduct amounting to fraud or embezzlement or any other act by Employee which is negligently or willfully performed which has the effect of damaging the reputation of the Company or its business, (iii) breach of fiduciary duty as an officer of the Company, (iv) the violation by the Employee of any material provision of this Agreement, including but not limited to the provisions of Sections 5, 6, 7, 8 or 10 hereof. 5. Business Opportunities. Subject to the provisions of Paragraph 2(b), for as long as the Employee shall be employed by the Company, the Employee agrees that with respect to any new and future business opportunity or other new and future business proposal which is offered to, or comes to the attention of, the Employee during employment and which is in any way related to, or connected with, the business of the Company or its affiliates, the Company shall have the right to take advantage of such business opportunity or other business proposal for its own benefit. The Employee agrees to promptly deliver notice to the board of directors of the Company in writing (the "Notice of Opportunity") of the existence of such opportunity or proposal and the Employee may take advantage of such opportunity only if the Company does not elect to exercise its right to take advantage of such opportunity within thirty (30) days after receipt of the Notice of Opportunity. Thereafter, the Company shall be deemed to have waived its rights to such opportunity and the Employee shall have the right to pursue such opportunity upon the terms and conditions set forth in this Agreement, specifically subject to the terms of Section 2 of this Agreement. 6. Intellectual Property. Employee hereby assigns to the Company all inventions, processes, discoveries and improvements (whether or not patentable) which are conceived, made or learned by Employee alone or jointly with others in the course of his employment with the Company that pertain to the business interests of the Company or relating to areas which may be reasonably anticipated to be encompassed by such business interests of the Company at the time of conception. Employee at any time during or after his employment will promptly disclose to the Company all such processes, inventions, discoveries or improvements assigned hereby. Employee will also, at the Company's expense, cooperate in all lawful acts which may be necessary or desirable in the judgment of the Company to protect or vest title to such inventions, processes, discoveries or improvements in the Company or its nominee including, without limitation, applying for, obtaining, maintaining, and enforcing patents thereon in all countries of the world, and including execution of papers appropriate thereto. 7. Confidential Information. The Employee acknowledges that he will receive or come in contact with, among other things, trade secrets (both technical and non-technical), know-how, lists of customers, suppliers, contractors, customers, employee records and other confidential and proprietary information about the business of the Company (hereinafter collectively referred to as "information"), all of which the Company considers highly confidential, giving the Company significant advantage over competitors, and which the Company desires to protect. The Employee understands that such information is the sole property of the Company, and that the information is confidential, and he agrees that both during and after his employment with the Company he will not at any time use or reveal such information to anyone except as permitted by the Company or required by Employee's employment duties with the Company. The employee shall have no obligation under this Agreement with respect to Confidential Information which is or becomes publicly available without breach of this Agreement by Employee. Upon termination of employment hereunder, the Employee agrees to surrender to the Company all papers, documents, writings and other property produced by him or coming into his possession by or through his employment hereunder, and the Employee agrees that all such materials and information will at all times remain the property of the Company. 8. Restrictive Covenant. In consideration of $10 and other good and valuable separate consideration given by Company to Employee, Employee agrees that during the period of time that the Employee is employed by the Company and for a period of two (2) year(s) following the termination of this Agreement for any reason, the Employee shall not, except as expressly approved in writing by the Board of Directors of the Company, directly or indirectly: (a) (i) cause or be instrumental in the formation of, or (ii) within any state in which the Company then conducts business engage in, whether as principal, agent, trustee, member or employee or through the agency of any corporation, partnership, association, agent or agency, any business competitive with the business then conducted by the Company or its subsidiaries or affiliates (a "Competing Business"); (b) be the owner of more than one percent (1%) of the equity (whether capital stock, membership or partnership interests) of any entity (except for stock publicly traded on any recognized stock exchange) which is engaged, directly or indirectly, in a Competing Business; or (c) through any person, firm, association or corporation with which he is now or may hereafter become associated, cause or induce any present or future employee of the Company to leave the employ of the Company or to accept employment with the Employee or with any Competing Business. The foregoing agreement not to compete shall not be held invalid or unenforceable because of the scope of the territory or actions subject thereto or restricted thereby, or the period of time within which such agreement is operative, but any judgment of a court of competent jurisdiction may define the maximum territory and actions subject to and restricted by this Section 8 and the period of time during which such agreement is enforceable. In the event the Company shall cease to do business, this Section 8 shall not apply. 9. Specific Performance; Survival. The Employee acknowledges that a remedy at law for any breach or attempted breach of Sections 5, 6, 7 or 8 of this Agreement will be inadequate, agrees that the Company shall be entitled to specific performance and injunctive and other equitable relief in case of any such breach of attempted breach, and further agrees to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or any other equitable relief. The Parties hereto acknowledge that the covenants contained in Sections 5, 6, 7, 8 and 9 shall survive the termination of this Agreement, by either party, for any reason. 10. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such provision or invalidity only, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 11. Binding Effect. This Agreement shall be binding on the parties hereto when executed by Employee and the Chief Executive Officer of Company. Employee acknowledges and agrees that no representative of Company other than the Chief Executive Officer has any authority to enter into any employment contract or bind Company unless authorized in writing by the Chief Executive Officer of Company to do so. 12. Utah Law to Apply; Arbitration. This Agreement shall be governed by and construed pursuant to the laws of the State of Utah, notwithstanding conflicts of laws principles thereof. Company and Employee hereby submit to the jurisdiction of the courts, mediations and arbitral panels located in, and agree that venue shall lie for all purposes in Davis, County, Utah. Except for actions involving requests by Company for relief under paragraph 9 hereof, Employee and Company hereby knowingly and voluntarily agree that any disputes or conflicts in any way arising out of or relating to the employment relation between Employee and Company created by this agreement shall be mediated or arbitrated, at the written election of either party hereto. If either Employee or Company make a proper election to mediate under this paragraph 12, but such mediation efforts fail to resolve the subject dispute(s) between the parties, the parties shall be bound to resolve the subject dispute(s) by binding arbitration. Where the subject dispute(s) are ultimately resolved by arbitration, the parties hereto irrevocably agree to be bound by all findings of fact and conclusions of law of the arbitrator(s) selected. Either party may elect under this paragraph 12 to proceed either to mediation or arbitration by delivery of written notice to the opposing Party and to the Judicial Arbitration and Mediation Services office where such proceeding is to be held. Each mediation or arbitration proceeding hereunder will be conducted in accordance with the rules of the Judicial Arbitration and Mediation Services (the "JAMS Rules"), including selection of mediator(s) or arbitrator(s). The mediation or arbitration will be held in Layton, Utah, unless both parties agree to another location. All federal and state laws applicable to this agreement relating to arbitration or mediation of conflicts shall be fully complied with by the parties. 13. Notices. Any notices required by this Agreement shall be effectively given if given in writing by personal delivery or by depositing same in the United States mail, registered or certified, postage prepaid, return receipt requested. For purposes of this provision, Company's address shall be 476 Heritage Park Blvd, suite 210, Layton, Utah 84041, or at such other place as may be designated by Company from time to time. Employee's address shall be employees home address or at such other place as may be designated by Employee from time to time. 14. Assignment. This Agreement may not be assigned by the Employee. Neither the Employee, his spouse nor their estates shall have any right to commute, encumber or dispose of any right to receive payments hereunder, it being that such payments and the right thereto are nonassignable and nontransferable. 15. Entire Agreement. This Agreement, together with all exhibits and attachments hereto and all documents and instruments executed and delivered in connection herewith, constitutes the entire agreement of the parties hereto, and supersedes all prior understandings with respect to the subject matter hereof. 16. Acknowledgment. Employee acknowledges that he has read and understands this Agreement, and that he has received a fully executed copy of same. IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the Effective Date. THE COMPANY: COMPUTERIZED THERMAL IMAGING, INC. /s/Richard V. Secord - ----------------------------------- Richard V. Secord, Chairman and CEO THE EMPLOYEE: /s/Kevin L. Packard - ----------------------------------- Kevin L. Packard, Individually Exhibits A - CTI Restricted Stock Agreement B - 1997 Incentive Stock Plan EXHIBIT "A" Computerized Thermal Imaging, Inc. Employee Restricted Stock Agreement Pursuant to that certain Employment Agreement (the "Employment Agreement") effective as of February 1, 2001 between Computerized Thermal Imaging, Inc. (the "Company") and Kevin L. Packard (the "Employee"), the Company hereby grants to Employee, subject to all terms and conditions of the Employment Agreement, this Employee Restricted Stock Agreement, and that certain Computerized Thermal Imaging, Inc. 1997 Stock Option and Restricted Stock Plan (the "Plan") of the Company, a copy of which is attached hereto and incorporated by reference herein for all purposes, fifty thousand (50,000) shares of (the "Shares") of the Company's Common Stock, $0.001 par value per share. Subject to forfeiture as hereafter provided, the Restricted Stock granted herein becomes vested on August 1, 2001. Upon vesting, Employee shall have full rights and ownership in Restricted Stock, which shall no longer be subject to any further restrictions whatsoever. The Restricted Stock shall be forfeited if, as, and when Employee's employment with the Company is terminated by the Company for Cause (as defined in the Employment Agreement) or is voluntarily terminated by the Employee prior to August 1, 2001. If, as, and when Employee desires to have registered free-trading common stock shares issued from his Restricted Stock Account to be maintained by the Company in accordance with the Plan, he may do so by delivering written notice of such desire to the Company at its offices in Layton, Utah, together with appropriate payment for the Employee's portion of applicable payroll taxes due to the Company for the issuance of such shares. The Employee hereby accepts and agrees to be bound by all the terms and conditions of the Plan, to which these Restricted Shares are subject. Computerized Thermal Imaging, Inc. By /s/Richard V. Secord - ----------------------------------- Richard V. Secord, Chairman and CEO Granted as of the first day of February, 2001. /s/Kevin L. Packard - ----------------------------------- Kevin L. Packard, Individually Exhibit B - CTI 1997 Stock Option Plan