ORTHOLOGIC CORP
JAMES RYABY EMPLOYMENT AGREEMENT
<DOCUMENT>
<TYPE>EX-10.21
<SEQUENCE>3
<FILENAME>ex10-21.txt
<DESCRIPTION>JAMES RYABY EMPLOYMENT AGREEMENT
<TEXT>
                                                                        EX-10.21

                              EMPLOYMENT AGREEMENT

     This Agreement is to be effective, as of June 1, 2001, by and between
OrthoLogic Corp., a Delaware corporation (the "Company"), and James Ryaby
("Employee").

RECITALS:

     A. The parties wish to set forth in this Agreement the terms and conditions
of employment.

AGREEMENT:

     In consideration of the mutual covenants and agreements set forth herein,
the parties agree as follows:

     1. EMPLOYMENT AND DUTIES. Subject to the terms and conditions of this
Agreement, the Company employs Employee to serve in a managerial capacity and
Employee accepts such employment and agrees to perform such reasonable
responsibilities and duties as may be assigned to him from time to time by the
Chief Executive Officer (CEO). Employee's title shall be Vice President, with
general responsibility for Research. Such title and duties may be changed from
time to time by the CEO. Employee will initially report to the CEO.

     2. TERM. The initial term of this Agreement shall expire on December 31,
2001. Thereafter this Agreement shall renew automatically for additional terms
of one-year each unless it is terminated pursuant to Section 6.

     3. COMPENSATION.

          (a) SALARY. From the effective date of this Agreement, the Company
shall pay Employee a minimum base annual salary, before deducting all applicable
withholdings, of $145,000 per year, payable at the times and in the manner
dictated by the Company's standard payroll policies. Effective March 2002, and
annually thereafter, the minimum base annual salary shall be reviewed in
accordance with the Company's compensation policy.

          (b) BONUS. Employee shall be eligible to participate in such bonus and
incentive programs as determined from time to time by the Board. Any bonuses
shall be based upon the achievement of individual goals and Company performance.
With respect to the year ending December 31, 2001, Employee will be eligible for
a target bonus of 40% of Employee's base salary for achievement of the
Board-approved plan

     4. FRINGE BENEFITS. In addition to the compensation described in Section 3,
and any other employee benefit plans (including without limitation pension,
savings and disability plans) generally available to employees, the Company
shall include Employee in any group health insurance plan and, if eligible, any

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group retirement plan instituted by the Company. The manner of implementation of
such benefits with respect to such items as procedures and amounts are
discretionary with the Company.

     5. VACATION. Employee shall be entitled to vacation with pay in accordance
with the Company's vacation policy as in effect from time to time. In addition,
Employee shall be entitled to such holidays as the Company may approve from time
to time.

     6. TERMINATION.

          (a) FOR CAUSE. The Company may terminate this Agreement for cause upon
written notice to Employee stating the facts constituting such cause, provided
that Employee shall have 30 days following such notice to cure any conduct or
act, if curable, alleged to provide grounds for termination for cause hereunder.
In the event of termination for cause, the Company shall be obligated to pay
Employee only the minimum base salary due him through the date of termination.
The written notice shall state the cause for termination. Cause shall include
neglect of duties, willful failure to abide by instructions or policies from or
set by the Board of Directors, commission of a felony or serious misdemeanor
offense or pleading guilty or NOLO CONTENDERE to same, Employee's breach of this
Agreement or Employee's breach of any other material obligation to the Company.

          (b) WITHOUT CAUSE. The Company may terminate Employee's Employment at
any time, immediately and without cause, by giving written notice to Employee.
If the Company terminates Employee without cause, provided Employee first
executes a Severance Agreement in the form then used by the Company, the Company
shall continue to pay to Employee his minimum base salary in effect at the time
of termination for a period of one year following the date of termination, at
the time and in the manner dictated by the Company's standard payroll policies.
Should such termination occur as a result of a change in control, the Company
shall also pay Employee a pro-rata share of his bonus at the time of
termination.

          (c) DISABILITY. If during the term of this Agreement, Employee fails
to perform his duties hereunder on account of illness or other incapacity for a
period of 45 consecutive days, or for 60 days during any six-month period, the
Company shall have the right to terminate this Agreement without further
obligation hereunder except as otherwise provided in disability plans generally
applicable to employees.

          (d) DEATH. If Employee dies during the term of this Agreement, this
Agreement shall terminate immediately, and Employee's legal representatives
shall be entitled to receive the base salary due Employee through the last day
of the calendar month in which his death shall have occurred and any other death
benefits generally applicable to employees.

          (e) RESIGNATION. Employee may resign his employment by giving the
Company written notice. In the event of such a resignation, the Company shall be
obligated to pay Employee only the minimum base salary due him.

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     7. CONFIDENTIAL INFORMATION. Employee acknowledges that Employee may
receive, or contribute to the production of, Confidential Information. For
purposes of this Agreement, Employee agrees that "Confidential Information"
shall mean any and all information or material proprietary to the Company or
designated as Confidential Information by the Company and not generally known by
non-Company personnel, which Employee develops or of or to which Employee may
obtain knowledge or access through or as a result of Employee's relationship
with the Company (including information conceived, originated, discovered or
developed in whole or in part by Employee). Confidential Information includes,
but is not limited to, the following types of information and other information
of a similar nature (whether or not reduced to writing) related to the Company's
business: discoveries, inventions, ideas, concepts, research, development,
processes, procedures, "know-how", formulae, marketing or manufacturing
techniques and materials, marketing and development plans, business plans,
customer names and other information related to customers, price lists, pricing
policies, methods of operation, financial information, employee compensation,
and computer programs and systems. Confidential Information also includes any
information described above which the Company obtains from another party and
which the Company treats as proprietary or designates as Confidential
Information, whether or not owned by or developed by the Company, including
Confidential Information acquired by the Company from any of its affiliates.
Employee acknowledges that the Confidential Information derives independent
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use. Information publicly known without
breach of this Agreement that is generally employed by the trade at or after the
time Employee first learns of such information, or generic information or
knowledge which Employee would have learned in the course of similar employment
or work elsewhere in the trade, shall not be deemed part of the Confidential
Information. Employee further agrees:

          a. To furnish the Company on demand, at any time during or after
employment, a complete list of the names and addresses of all present, former
and potential suppliers, financing sources, clients, customers and other
contacts gained while an employee of the Company in Employee's possession,
whether or not in the possession or within the knowledge of the Company.

          b. That all notes, memoranda, electronic storage, documentation and
records in any way incorporating or reflecting any Confidential Information
shall belong exclusively to the Company, and Employee agrees to turn over all
copies of such materials in Employee's control to the Company upon request or
upon termination of Employee's employment with the Company.

          c. That while employed by the Company and thereafter Employee will
hold in confidence and not directly or indirectly reveal, report, publish,
disclose or transfer any of the Confidential Information to any person or
entity, or utilize any of the Confidential Information for any purpose, except
in the course of Employee's work for the Company.

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          d. That any idea in whole or in part conceived of or made by Employee
during the term of his employment, consulting, or similar relationship with the
Company which relates directly or indirectly to the Company's current or planned
lines of business and is made through the use of any of the Confidential
Information of the Company or any of the Company's equipment, facilities, trade
secrets or time, or which results from any work performed by Employee for the
Company, shall belong exclusively to the Company and shall be deemed a part of
the Confidential Information for purposes of this Agreement. Employee hereby
assigns and agrees to assign to the Company all rights in and to such
Confidential Information whether for purposes of obtaining patent or copyright
protection or otherwise. Employee shall acknowledge and deliver to the Company,
without charge to the Company (but at its expense) such written instruments and
do such other acts, including giving testimony in support of Employee's
authorship or inventorship, as the case may be, necessary in the opinion of the
Company to obtain patents or copyrights or to otherwise protect or vest in the
Company the entire right and title in and to the Confidential Information.

     8. LOYALTY DURING EMPLOYMENT TERM. Employee agrees that during the term of
Employee's employment by the Company, Employee will devote substantially all of
Employee's business time and effort to and give undivided loyalty to the
Company, and will not engage in any way whatsoever, directly or indirectly, in
any business that is competitive with the Company or its affiliates, nor
solicit, or in any other manner work for or assist any business which is
competitive with the Company or its affiliates. During the term of Employee's
employment by the Company, Employee will undertake no planning for or
organization of any business activity competitive with the Company or its
affiliates, and Employee will not combine or conspire with any other employee of
the Company or any other person for the purpose of organizing any such
competitive business activity.

     9. NON-COMPETITION; NON-SOLICITATION. The parties acknowledge that Employee
will acquire much knowledge and information concerning the business of the
Company and its affiliates as the result of Employee's employment. The parties
further acknowledge that the scope of business in which the Company is engaged
as of the date of execution of this Agreement is world-wide and very competitive
and one in which few companies can successfully compete. Certain activities by
Employee after this Agreement is terminated would severely injure the Company.
Accordingly, until one year after this Agreement is terminated or Employee
leaves the employment of the Company for any reason, Employee will not:

          a. Engage in any work activity for or in conjunction with any business
or entity that is in competition with or is preparing to compete with the
Company;

          b. Persuade or attempt to persuade any potential customer or client to
which the Company or any of its affiliates has made a proposal or sale, or with
which the Company or any of its affiliates has been having discussions, not to
transact business with the Company or such affiliate, or instead to transact
business with another person or organization;

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          c. Solicit the business of any customers, financing sources, clients,
suppliers, or business patrons of the Company or any of its predecessors or
affiliates which were customers, financing sources, clients, suppliers, or
business patrons of the Company at any time during Employee's employment by the
Company, or within three years prior to the Effective Date of Employee's
employment, provided, however, that if Employee becomes employed by or
represents a business that exclusively sells products that do not compete with
products then marketed or intended to be marketed by the Company, such contact
shall be permissible; or

          d. Solicit, endeavor to entice away from the Company or any of its
affiliates, or otherwise interfere with the relationship of the Company or any
of its affiliates with, any person who is employed by or otherwise engaged to
perform services for the Company or any of its affiliates, whether for
Employee's account or for the account of any other person or organization.

     10. INJUNCTIVE RELIEF. It is agreed that the restrictions contained in
Sections 8, 9 and 10 of this Agreement are reasonable, but it is recognized that
damages in the event of the breach of any of those restrictions will be
difficult or impossible to ascertain; and, therefore, Employee agrees that, in
addition to and without limiting any other right or remedy the Company may have,
the Company shall have the right to an injunction against Employee issued by a
court of competent jurisdiction enjoining any such breach without showing or
proving any actual damage to the Company. This paragraph shall survive the
termination of Employee's employment.

     11. PART OF CONSIDERATION. Employee also agrees, acknowledges, covenants,
represents and warrants that he is fully and completely aware that, and further
understands that, the restrictive covenants contained in Sections 8, 9, and 10
of this Agreement are an essential part of the consideration for the Company
entering into this Agreement and that the Company is entering into this
Agreement in full reliance on these acknowledgments, covenants, representations
and warranties.

     12. TIME AND TERRITORY REDUCTION. If any of the periods of time and/or
territories described in Sections 8, 9 and 10 of this Agreement are held to be
in any respect an unreasonable restriction, it is agreed that the court so
holding may reduce the territory to which the restriction pertains or the period
of time in which it operates or may reduce both such territory and such period,
to the minimum extent necessary to render such provision enforceable.

     13. SURVIVAL. The obligations described in Sections 8 and 10 of this
Agreement shall survive any termination of this Agreement or any termination of
the employment relationship created hereunder.

     14. NONDELEGABILITY OF EMPLOYEE'S RIGHTS AND COMPANY ASSIGNMENT RIGHTS. The
obligations, rights and benefits of Employee hereunder are personal and may not

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be delegated, assigned or transferred in any manner whatsoever, nor are such
obligations, rights or benefits subject to involuntary alienation, assignment or
transfer. Upon mutual agreement of the parties, the Company upon reasonable
notice to Employee may transfer Employee to an affiliate of the Company, which
affiliate shall assume the obligations of the Company under this Agreement. This
Agreement shall be assigned automatically to any entity merging with or
acquiring the Company.

     15. AMENDMENT. Except for documents regarding the grant of stock options
and an Invention, Confidential Information and Non-Competition Agreement, this
Agreement contains, and its terms constitute, the entire agreement of the
parties and supersedes any prior agreements, including any Employment
Agreements, and it may be amended only by a written document signed by both
parties to this Agreement.

     16. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Arizona, exclusive
of the conflict of law provisions thereof, and the parties agree that any
litigation pertaining to this Agreement shall be in courts located in Maricopa
County, Arizona.

     17. ATTORNEYS' FEES. If any party finds it necessary to employ legal
counsel or to bring an action at law or other proceeding against the other party
to enforce any of the terms hereof, the party prevailing in any such action or
other proceeding shall be paid by the other party its reasonable attorneys' fees
as well as court costs all as determined by the court and not a jury.

     18. NOTICES. All notices, demands, instructions, or requests relating to
this Agreement shall be in writing and, except as otherwise provided herein,
shall be deemed to have been given for all purposes (i) upon personal delivery,
(ii) one day after being sent, when sent by professional overnight courier
service from and to locations within the Continental United States, (iii) five
days after posting when sent by United States registered or certified mail, with
return receipt requested and postage paid, or (iv) on the date of transmission
when sent by facsimile with a hard-copy confirmation; if directed to the person
or entity to which notice is to be given at his or its address set forth in this
Agreement or at any other address such person or entity has designated by
notice.

          To the Company:     ORTHOLOGIC CORP.
                              1275 West Washington Street
                              Tempe, AZ 85281
                              Attention: Chief Executive Officer

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          To Employee:        James Ryaby

     19. ENTIRE AGREEMENT. This Agreement, the Invention, Confidential
Information and Non-Competition Agreement dated February 9, 1999, and documents
regarding the grant of stock options constitute the final written expression of
all of the agreements between the parties and are a complete and exclusive
statement of those terms. They supersede all understandings and negotiations
concerning the matters specified herein. Any representations, promises,
warranties or statements made by either party that differ in any way from the
terms of this written Agreement shall be given no force or effect. The parties
specifically represent, each to the other, that there are no additional or
supplemental agreements between them related in any way to the matters herein
contained unless specifically included or referred to herein. No addition to or
modification of any provision of this Agreement shall be binding upon any party
unless made in writing and signed by all parties. To the extent that there is
any conflict between this Agreement and the Invention, Confidential Information
and Non-Competition Agreement, the provisions of this Agreement shall govern.

     20. WAIVER. The waiver by either party of the breach of any covenant or
provision in this Agreement shall not operate or be construed as a waiver of any
subsequent breach by eithis party.

     21. INVALIDITY OF ANY PROVISION. The provisions of this Agreement are
severable, it being the intention of the parties hereto that should any
provisions hereof be invalid or unenforceable, such invalidity or
unenforceability of any provision shall not affect the remaining provisions
hereof, but the same shall remain in full force and effect as if such invalid or
unenforceable provisions were omitted.

     22. ATTACHMENTS. All attachments or exhibits to this Agreement are
incorporated herein by this reference as though fully set forth herein. In the
event of any conflict, contradiction or ambiguity between the terms and
conditions in this Agreement and any of its attachments, the terms of this
Agreement shall prevail.

     23. INTERPRETATION OF AGREEMENT. When a reference is made in this Agreement
to an article or section, such reference shall be to an article or section of
this Agreement unless otherwise indicated. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation."

     24. HEADINGS. Headings in this Agreement are for informational purposes
only and shall not be used to construe the intent of this Agreement.

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     25. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement.

     26. BINDING EFFECT; BENEFITS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
successors, executors, administrators and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.

     This Agreement has been executed by the parties as the date first written
above.

                                        ORTHOLOGIC CORP.
                                        ("Company")


                                        By: /s/ Thomas R. Trotter
                                            ------------------------------------
                                            Thomas R. Trotter
                                            President/Chief Executive Officer


                                       JAMES RYABY
                                       ("Employee")


                                        By: /s/ James Ryaby
                                            ------------------------------------

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