EXHIBIT 10.9(A)
DECEMBER 4, 2002
Xx. Xxxxxxx Xxxxx, Ph.D.
00 Xxxxxx Xxxxx Xxxxx
Potomac, MD 20854
Dear Xx. Xxxxx,
This letter is intended to memorialize the terms under which you ("YOU")
have agreed to commit to full-time employment with International Remote Imaging
Systems, Inc. (the "COMPANY") and assume the duties of chief executive officer
and president of the Company.
1. TERM OF EMPLOYMENT. The Company agrees to employ You, and You accept
full-time employment with the Company, on the terms set forth in this Agreement
for a period commencing as of January 6, 2003 (the "START DATE") and terminating
in accordance with the provisions of Section 3 (such period of time constituting
the "TERM").
2. POSITION AND RESPONSIBILITIES.
2.1 The Company will employ you and you shall serve in an executive
capacity as CHIEF EXECUTIVE OFFICER AND PRESIDENT, and perform the duties
customarily associated with such capacities from time to time as the Company
shall reasonably designate or as shall be reasonably appropriate and necessary
in connection with such employment.
2.2 Subject to Section 5 below, you will, to the best of your
ability, devote your full time and best efforts to the performance of your
duties hereunder and the business and affairs of the Company. You will report to
the Company's Board of Directors.
2.3 You will duly, punctually and faithfully perform and observe any
and all rules and regulations that the Company may now or shall hereafter
establish governing the conduct of its business, except to the extent that such
rules and regulations may be inconsistent with your executive position.
3. TERM OF EMPLOYMENT; TERMINATION.
3.1 The commencement of your employment shall be January 6, 2003
(your "Start Date").
1.
3.2 Unless otherwise mutually agreed in writing, this Agreement and
your employment by the Company pursuant to this Agreement shall be terminated on
the earliest of:
(a) your death, or any illness, disability or other incapacity
in such a manner that you are physically rendered unable regularly to perform
your duties hereunder for a period in excess of one hundred twenty (120)
consecutive days or more than one hundred eighty (180) days in any consecutive
twelve (12) month period;
(b) thirty (30) days after you, for any reason, give written
notice to the Company of your termination; or
(c) immediately if the Company, with or without cause, gives
written notice to you of your termination.
3.3 The determination regarding whether you are physically unable
regularly to perform your duties under (a) above shall be made by the Board of
Directors and shall be consistent with the definition of disability for the
purposes of your long term disability insurance.
3.4 Any notice required to be given pursuant to this Section 2 shall
be given in accordance with the provisions of Section 10 hereof. The exercise of
either party's right to terminate this Agreement pursuant to subsections (b) or
(c) above shall not abrogate the rights and remedies of the terminating party
regarding the breach, if any, giving rise to such termination.
3.5 You may be terminated with or without cause. If you are
terminated without cause, you will be entitled to certain severance benefits as
described in this Agreement. You shall be deemed terminated for cause if, in the
reasonable determination of the Company, you (a) commit an act that is
fraudulent, dishonest or a material breach of the Company's policies, including
wrongful disclosure of any trade secrets or other confidential information of
the Company, or material breach of Section 4 of this Agreement or any material
provision of the Proprietary Information Agreement (as defined in Section 5),
(b) are convicted of a felony under federal, state, or local law applicable to
the Company or (c) intentionally refuse, without proper cause, to substantially
perform duties after a demand for such performance has been delivered in writing
by the Company's Chairman or the Board of Directors, which notice shall specify
the alleged instance of breach, and, shall provide you with reasonable time in
which to remedy such breach.
4.0 COMPENSATION; BENEFITS; AND INVESTMENT RIGHTS:
4.1 The Company shall pay to you for the services to be rendered
hereunder a basic salary at an annual rate of $260,000.00 subject to increases
in accordance with the policies of the Company, as determined by its Board of
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Directors, in force from time to time, payable in installments in accordance
with Company policy. You shall also be entitled to all rights and benefits for
which you shall be eligible under bonus, pension, group insurance, long-term
disability, life insurance, profit-sharing or other Company benefits which may
be in force from time to time and provided to you or for the Company's executive
officers generally.
4.2 You will be awarded a 5-year incentive stock (ISO) option to
purchase 200,000 shares of the Company's Common Stock at per share price equal
to the fair market value of our common stock at close of market on November 20,
2002 vesting in three equal installments on the first, second and third
anniversaries of your Start Date. In addition, You will be awarded a fully
vested 5-year incentive stock option to purchase 50,000 shares of the Company's
Common Stock at per share price equal to the fair market value of our common
stock at close of market on November 20, 2002. - The Company acknowledges that
the option grant described in the Section 4.2 constitutes a substantial
inducement to you accepting employment with the Company.
4.3 You shall be eligible to participate in the Company's ESSP
Program as in effect from time to time. The ESSP Program currently provides that
employees may purchase common stock of the Company at a 50% discount from the
market price in an aggregate amount up to 15% of your total cash compensation.
4.4 For the calendar years commencing January 1, 2003, You shall be
eligible for an annual cash bonus to be determined by the Compensation Committee
of the Board of Directors. You will receive a guaranteed minimum bonus of
$50,000 for 2003. There will be no bonus if you resign or are terminated for
cause prior to the end of a fiscal year.
4.5 You shall be entitled to four (4) weeks of paid vacation per
year to be taken at such time as will not interfere with the performance of your
duties. You will also be entitled to illness days during the term of this
Agreement consistent with the Company's standard practice for its employees
generally as in effect from time to time.
4.6 You shall be entitled to up to a total of $50,000 for
reimbursement of moving expenses, temporary living expenses, and expenses
associated with the purchase of a new residence within reasonable driving
distance of Chatsworth, CA. This money will be paid to you, upon your request,
partly as reimbursement for specific expenses, and the remainder as a lump sum
upon the purchase of a new residence within reasonable driving distance of
Chatsworth, CA.
4.7 You shall be entitled to use of a company car during your
employment.
3.
4.8 You shall be appointed to the Board of Directors effective on
your Start Date, and you agree to serve as a director during your employment as
Chief Executive Officer. All directors serve for fixed terms and must be
nominated for re-election by the Nominating Committee. Employee directors do not
receive additional consideration for service on the Board. You will resign from
the Board of Directors immediately if you cease to be Chief Executive Officer
for any reason unless requested otherwise by the Board of Directors. You may
decline a request to continue serving on the Board if you are no longer an
employee.
4.9 In the event you are terminated without cause any time within
the first twelve months of employment, pursuant to Section 3.2(c) hereof, the
Company shall pay you for the remaining months of your contract for 2003 and the
equivalent of twelve (12) months base salary following such termination. At the
choice of the Company, payment may be in the form of a lump sum payment or
through regular payroll payments over the payout period. In the event you are
terminated without cause any time after the twelve (12) month of employment,
pursuant to Section 3.2(c) hereof, the Company shall pay you the equivalent of
twelve (12) months base salary following such termination. Furthermore, the
Company will provide medical and dental insurance benefits comparable to those
in effect for employees at the time of your termination until the earlier of (i)
18 months beyond the applicable salary continuation period or (ii) the date you
become eligible to participate in the medical and dental insurance policies of
another employer. The Company may, at its option, provide such benefits by
either paying on your behalf the COBRA payments to continue coverage under the
Company's existing group insurance policies or by purchasing separate but
comparable insurance coverage. Termination without cause shall include
"constructive termination" in the event of a significant diminution of your
fundamental responsibilities as Chief Executive Officer and President.
5.0 OTHER ACTIVITIES DURING EMPLOYMENT.
5.1 Except with the prior written consent of the Company's Board of
Directors, you will not during the term of this Agreement undertake or engage in
any other employment, occupation or business enterprise, other than ones in
which you are a passive investor in non-competitive businesses. You may engage
in civic and not-for-profit activities so long as such activities do not
materially interfere with the performance of your duties hereunder.
5.2 Except as permitted by Section 5.3, you will not acquire, assume
or participate in, directly or indirectly, any position, investment or interest
known by you to be adverse or antagonistic to, or competitive with, the Company,
its business or prospects, financial or otherwise.
5.3 During the term of your employment by the Company (except on
behalf of the Company), you will not directly or indirectly, whether as an
officer, director, stockholder, partner, proprietor, associate, representative,
consultant, or in any capacity whatsoever engage in, become financially
interested in, be
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employed by or have any business connection with any other person, corporation,
firm, partnership or other entity whatsoever which were known by you to directly
or indirectly compete with the Company, throughout the world, in any line of
business engaged in (or planned to be engaged in) by the Company; provided,
however, that anything above to the contrary notwithstanding, you may own, as a
passive investor, securities of any competitor corporation, so long as your
direct holdings in any one such corporation shall not in the aggregate
constitute more than 1% of the publicly-traded voting stock of such corporation.
6.0 PROPRIETARY INFORMATION AND INVENTIONS. You agree to sign and be
bound by the provisions of the Company's standard Employee Acknowledgement Form
(the "Proprietary Information Agreement").
7.0 REMEDIES. Your duties under the Proprietary Information Agreement
shall survive termination of your employment with the Company. You acknowledge
that a remedy at law for any breach or threatened breach by you of the
provisions of the Proprietary Information Agreement would be inadequate and you
therefore agree that the Company shall be entitled to injunctive relief in case
of any such breach or threatened breach.
8.0 ASSIGNMENT. Neither this Agreement nor any rights or obligations
hereunder may be assigned by the Company or by you.
9.0 SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to duration, geographical scope, activity or subject, it shall be construed
by limiting and reducing it, so as to be enforceable to the extent compatible
with the applicable law as it shall then appear.
10.0 NOTICES. Any notice which the Company is required or may desire to
give you shall be given by personal delivery or registered or certified mail,
return receipt requested, addressed to you at the address of record with the
Company, or at such other place as you may from time to time designate in
writing. Any notice which you are required or may desire to give to the Company
hereunder shall be given by personal delivery or by registered or certified
mail, return receipt requested, addressed to the Company at its principal
office, or at such other office as the Company may from time to time designate
in writing. The date of personal delivery or the date of mailing any such notice
shall be deemed to be the date of delivery thereof.
11.0 WAIVER. If either party should waive any breach of any provisions of
this Agreement, he or it shall not thereby be deemed to have waived any
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preceding or succeeding breach of the same or any other provision of this
Agreement.
12.0 COMPLETE AGREEMENT; AMENDMENTS. The foregoing, together with the
Proprietary Information Agreement, is the entire agreement of the parties with
respect to the subject matter hereof and thereof and may not be amended,
supplemented, canceled or discharged except by written instrument executed by
both parties hereto.
13.0 HEADINGS. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
14.0 CHOICE OF LAW. All questions concerning the construction, validity
and interpretation of this Agreement will be governed by the law of the State of
California.
IN WITNESS WHEREOF, the parties have executed this Key Employee Agreement
on the day and year written below.
INTERNATIONAL REMOTE IMAGING
SYSTEMS, INC.
By:
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Xxxx X. X'Xxxxxx, Chairman and CEO
Date:
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Accepted and agreed this
6th day of December, 2002
Xxxxxxx Xxxxx, Ph.D.
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