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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into
by HYCOR BIOMEDICAL INC., a Delaware corporation ("Company"), and XXXX JO DEAL
("Deal").
WHEREAS, the Company desires to employ Deal in an executive
capacity, Deal desires to accept such employment, and the parties desire to
memorialize the terms and conditions of their employment relationship,
NOW, THEREFORE, in consideration of the promises and covenants
set forth in this Agreement and for other valuable consideration, the parties
agree as follows:
1. Employment: Deal shall be employed as a Vice President of the
Company reporting to the President, and shall faithfully and diligently perform
all duties and responsibilities required of such position or assigned by the
President from time to time, including service on behalf of the Company's
subsidiary and affiliated companies.
2. Term. This Agreement and Deal's employment shall be for a term
of three (3) years commencing on September 1, 1997, and expiring on August 31,
2000, but shall be automatically renewed for successive one-year periods
thereafter unless either party gives written notice to the other party of
nonrenewal at least three (3) months in advance of the expiration date.
3. Compensation: In consideration for all services to be
performed under this Agreement, Deal shall receive the following compensation:
A. Salary: Deal shall be paid base salary at the rate of
One Hundred Twenty Thousand Dollars ($120,000) per year. Annually, the
Board of Directors, upon the recommendation of the President, shall
review Deal's performance with a view toward increasing her salary.
B. Bonus: Deal shall be entitled to participate in the
Company's Annual Executive Incentive Plan and the Long Term Executive
Incentive Plan, subject to all of the terms and conditions set forth in
said plans, as amended from time to time, as long as such plans remain
in effect, and to participate in any successor or similar incentive plan
available to management personnel of comparable status with the Company
or its affiliates. Nothing herein or in said plans shall constitute a
guarantee of Deal's employment by the Company, or a limitation on the
Company's rights under this Agreement, or limitation on the Company's
rights to amend or terminate any plan.
C. Employee Benefit Plans: Deal shall be entitled to
participate in all employee benefit plans, including group medical,
dental, visual, and life insurance, pension, profit sharing, group and
individual disability income, stock option, vacation, and other benefit
plans, on terms commensurate with the benefits awarded management
personnel of comparable status with the Company or any affiliate of the
Company, but subject, on any termination, to Section 4.E below.
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D. Expense Reimbursement: The Company shall reimburse
Deal for all reasonable expenses that she necessarily incurs in
connection with her employment and for which she presents adequate
documentation in accordance with Company policies in effect from time to
time.
4. Termination: This Agreement and Deal's employment are subject
to immediate termination at any time as follows:
A. Death: This Agreement shall terminate immediately upon
Deal's death, in which event the Company's only obligations shall be (i)
to pay all compensation owing for services rendered by Deal prior to the
date of her death; (ii) to continue paying Deal's base salary to her
estate for a period of thirty (30) days after her death; and (iii) to
make periodic recoverable advances to Deal's estate equivalent to Deal's
base salary for ninety (90) days after said thirty (30) day period has
lapsed, or until the proceeds from the life insurance policy on Deal's
life referred to in this Agreement become available, whichever occurs
first, with such advances to be repaid when said insurance proceeds
become available.
B. Disability: In the event that Deal is disabled from
performing her assigned duties under this Agreement due to illness or
injury for a period in excess of one hundred eighty (180) days, the
Company may place Deal on an unpaid leave of absence for a period not to
exceed six (6) months, in which case the Company's only obligation shall
be (i) to continue Deal's group medical and life insurance for the
duration of the leave; (ii) to pay the bonus, if any, that Deal would be
entitled to under the terms of the bonus plans referred to in Section 3B
of this Agreement; and (iii) to allow Deal to continue receiving
benefits under the disability insurance and other employee benefit plans
in effect at the time of her disability in accordance with the terms and
conditions of such plans. The granting of a leave of absence does not
guarantee that Deal will be returned to employment, and the Company
reserves the right to replace Deal or to take other action in her
absence due to business necessity. If Deal is certified to return to
work before her leave of absence expires, and desires to do so, the
following provisions shall apply: (i) the Company will attempt to return
Deal to her same or similar position, provided this does not result in
undue hardship to the Company; and (ii) if the Company is unable to
reinstate Deal because her position has been filled, then as a special
severance benefit, the Company shall pay a lump-sum severance payment
equal to twenty (20) months of Deal's base salary as in effect
immediately prior to the commencement of Deal's leave of absence. If
Deal is not certified to return to work before her leave of absence
expires, or does not desire to return, her employment and this Agreement
shall terminate upon the expiration of her leave of absence.
C. Termination For Cause: The Company may terminate this
Agreement for cause immediately upon written notice to Deal in the event
Deal (i) engages in any material misconduct, willful breach, or habitual
neglect of her duties as an officer of the Company, or (ii) is finally
convicted of a felony. In either event, the Company's sole obligation to
Deal in lieu of all claims for compensation or damages shall be to pay
all compensation owing for services rendered by Deal prior to the date
of termination under this subsection.
D. Termination Without Cause: The Company in its sole
discretion may terminate this Agreement without cause or prior warning
immediately upon written notice to Deal. For purposes of this Section
4D, any
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failure to renew this Agreement and any resignation following a
substantial reduction in Deal's salary, duties or responsibilities shall
constitute an involuntary termination without cause. In the event of a
termination under this Section 4D the Company shall pay all compensation
owing for services rendered by Deal prior to the date of termination,
shall pay a lump-sum severance benefit equal to twelve (12) months of
Deal's base salary at the time of termination, and shall continue to
provide Deal at Company expense all medical, disability and insurance
benefits available to her at the time of termination for a period of
twelve (12) months after the termination or, if shorter, the maximum
period allowed under the Company's policies as then in effect or under
applicable law. As an additional severance payment, if the Company has
in effect at the time of any termination without cause under this
Section 4D any bonus or incentive plan which provides for awards in cash
and is based on the Company's revenues or results of operations for a
fiscal year, Deal shall be entitled to an amount equal to a pro rata
award based on the period of the fiscal year for which she was employed
if a termination under this Section 4D occurs after the completion of
three fiscal quarters. Such severance shall be payable at the same time,
and computed on the same terms, as awards under the plan in question,
except for periods of service. Such payments and benefits shall not
entitle Deal to any other benefits or compensation program available to
Company employees.
E. Termination Following Change In Control: If either the
Company elects to terminate Deal without cause pursuant to Section 4(D)
within ninety (90) days before or twenty four (24) months after a change
in control or Deal elects to resign with good reason within twenty four
(24) months after a change in control of the Company, then as a
severance benefit and in lieu of all compensation or damages the Company
shall (i) pay Deal a lump sum equal to 200% of the average of the annual
base salary plus bonuses paid to Deal during each of the three years
prior to the time of such termination or resignation, (ii) continue to
provide Deal at Company expense all medical, disability and insurance
benefits available to her at the time of such termination or resignation
for a period of twenty four (24) months after such termination or
resignation, or, if shorter, the maximum period allowed under the
Company's policies as then in effect or under applicable law, (iii)
accelerate the vesting of all unvested stock options granted to Deal
under the Company's stock option or other benefit plans so that all such
stock options will vest and be fully exercisable on the date of such
termination or resignation, and (iv) extend the post-termination
exercise period for all stock options granted to Deal under the
Company's stock option and other benefit plans so that all such stock
options will be exercisable for a period of three months after the date
of such termination or resignation (except that with respect to any
stock options having a post-termination exercise period in excess of
three months, such longer post-termination exercise period shall remain
in effect).
For purposes of this subsection, the term "change in
control" shall mean any change in control that the Company would be
required to report in response to Item 5(f) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Without limiting the foregoing, a change
in control shall also be deemed to have occurred if (i) any "person" as
defined in Section 13(d) and 14(d) of the Exchange Act is or becomes,
directly or indirectly, the "beneficial owner" as defined in Rule 13
(d-3) under the Exchange Act of securities of the Company which
represent 25% or more of the combined voting power of the Company's then
outstanding securities; or (ii) during any period of two consecutive
years,
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individuals who at the beginning of said two year period constituted the
Board of Directors of the Company cease for any reason to constitute at
least a majority of the Board unless the election or nomination of each
new director was approved by a vote of at least two-thirds of the
directors who were in office at the beginning of said two year period.
For purposes of this subsection, Deal shall be deemed to
have resigned "with good reason" if she does so following a change in
control as a result of the Company having done any or all of the
following without Deal's express written consent: (i) assigned Deal
different duties or made changes in her reporting responsibilities,
title, or office that are substantially inconsistent with Deal's duties,
responsibilities, titles, or offices immediately prior to the change in
control; (ii) reduced Deal's base salary from that in effect at the time
of the change in control; (iii) failed to continue any bonus plan in
substantially the same form as it existed prior to the change in
control; (iv) required Deal to be based more than fifty (50) miles from
her present office location, except for required travel consistent with
Deal's present business travel obligations; (v) failed to continue any
plan or program for compensation, employee benefits, stock purchase or
ownership, life insurance, group medical, disability, or vacation in
substantially the same form as immediately prior to the change in
control, or otherwise made any material reduction in Deal's fringe
benefits, or (vi) failed to obtain the assumption of this Agreement by
any successor to the Company.
Deal shall not be entitled to the benefits of this
Section 4(E) if this Agreement and her employment are terminated
pursuant to Section 4(A), (B) or (C).
F. Company's Obligations Under This Agreement Exclusive:
The benefits set forth in subsections A through E above (which benefits,
in the event of termination pursuant to subsections A, C, D or E,
include payment for services rendered prior to termination as provided
in such subsections), as applicable, constitute the sole obligations of
the Company to Deal upon a termination and are in lieu of any damages or
other compensation that Deal may claim under other Company policies in
connection with this Agreement. The benefits on termination in this
Agreement are in substitution for any severance or termination benefits
otherwise available under Company policies of general application. Deal
expressly acknowledges that certain Company benefit or incentive plans
provide for vesting in, or award of, benefits based on employment on or
through particular dates and that nothing in this Agreement entitles her
to partial vesting or partial awards under such plans. Any payments
under Section 4D relating to any incentive or bonus plan are expressly
acknowledged to be benefits under this Agreement and not an
interpretation or modification of any such plan.
G. Resignation As Officer: In the event of any
termination pursuant to this Section 4, Deal shall be deemed to have
resigned as an officer of the Company if she was serving in such
capacity at the time of termination.
5. Confidentiality: Deal acknowledges and agrees that she has
been and will continue to be entrusted with trade and proprietary information
regarding the products, processes, methods of manufacture and delivery,
know-how, designs, formula, work in progress, research and development, computer
software and data bases, copyrights, trademarks, patents, marketing techniques,
and future business
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plans, as well as customer lists and information concerning the identity, needs,
and desires of actual and potential customers of the Company and its
subsidiaries, joint venturers, partners, and other affiliated persons and
entities ("Confidential Information"), all of which derive significant economic
value from not being generally known to others outside the Company.
A. During the entire term of her employment with the
Company and for two years thereafter, Deal shall not disclose or exploit
any Confidential Information except for the sole benefit of the Company
or with its express written consent.
B. During the entire term of her employment by the
Company and for one year thereafter, Deal shall not directly or
indirectly solicit any actual or potential customer of the Company or
its subsidiary and affiliated companies for any business that competes
directly or indirectly with the Company, except for the sole benefit of
the Company or with its express written consent.
C. During the entire term of her employment by the
Company and for one year thereafter, Deal shall not induce or attempt to
induce any employee of the Company to leave the Company's employ except
for the sole benefit of the Company or with its express written consent.
D. In the event any provision in this Section 5 is more
restrictive than allowed by the law of any jurisdiction in which the
Company seeks enforcement, such provision shall be deemed amended and
shall then be fully enforceable to the extent permitted by such law.
E. Deal acknowledges and agrees that any violation of
this Section 5 would cause immediate irreparable damage to the Company,
and that it would be extremely difficult or impossible to determine the
amount of damage caused to the Company. Deal therefore agrees that the
Company's remedies at law are inadequate, and hereby consents to
issuance of a temporary restraining order, preliminary and permanent
injunction, and other appropriate relief to restrain any actual or
threatened violation of this Section, without limiting any remedies the
Company may have at law or in equity.
6. Inventions: Any and all patents, copyrights, trademarks,
inventions, discoveries, developments, or trade secrets developed or perfected
by Deal during or as the result of her employment with the Company shall
constitute the sole and exclusive property of the Company. Deal shall disclose
all such matters to the Company, assign all right, title and interest she may
have in them, and cooperate with the Company in obtaining and perfecting any
patent, copyright, trademark, or other legal protection. This Section 6 shall
not apply to any invention which qualifies fully under California Labor Code
Section 2870, a true copy of which is attached to this Agreement as Exhibit A.
7. Conflict Of Interest: During the term of this Agreement, Deal
shall devote her time, ability, and attention to the business of the Company,
and shall not accept other employment or engage in any other outside business
activity which interferes with the performance of her duties and
responsibilities under this Agreement or which involves actual or potential
competition with the business of the Company, except with the express written
consent of the President.
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8. Employee Benefit Plans: All of the employee benefit plans
referred to or contemplated by this Agreement shall be governed solely by the
terms of the underlying plan documents and by applicable law. Nothing in this
Agreement shall impair the Company's right to amend, modify, replace and
terminate any and all such plans in its sole discretion as provided by law, or
to terminate this Agreement in accordance with its terms. This Agreement is for
the sole benefit of Deal and the Company, and is not intended to create an
employee benefit plan or to modify the term of existing plans.
9. Parachute Limitation: The payments and benefits Deal is
entitled to under this Agreement and all other contracts, arrangements, or
programs shall not, in the aggregate, exceed the maximum amount that may be paid
to Deal without triggering golden parachute penalties under Section 280G and
related provisions of the Internal Revenue Code, as determined in good faith by
the Company's independent auditors. If Deal's benefits must be cut back to avoid
triggering such penalties, Deal's benefits shall be cut back in the priority
order designated by Deal or, if Deal fails promptly to designate an order, in
the priority order designated by the Company. If an amount in excess of the
limit set forth in this Section is paid to Deal, Deal must repay the excess
amount to the Company upon demand, with interest at the rate provided for in
Internal Revenue Code Section 1274(b)(2)(B). Deal and the Company agree
reasonably to cooperate with each other in connection with any administrative or
judicial proceedings concerning the existence or amount of golden parachute
penalties with respect to payments or benefits Deal receives.
10. Assignment: This Agreement may not be assigned by Deal, but
may be assigned by the Company to any successor in interest to its business. In
the event the Company does not survive any merger, acquisition, or other
reorganization, it shall make a reasonable effort to obtain an assumption of
this Agreement by the surviving entity in such merger, acquisition, or other
reorganization, but the failure to obtain such assumption shall not prevent or
delay such merger, acquisition, or other reorganization or relieve the Company
of its other obligations under this Agreement. This Agreement shall bind and
inure to the benefit of the Company's successors and assigns, as well as Deal's
heirs, executors, administrators, and legal representatives.
11. Notices: All notices required by this Agreement may be
delivered by first class mail at the following addresses:
To the Company: Hycor Biomedical Inc.
00000 Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
To Deal: Xxxx Jo Deal
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
12. Amendment. This Agreement may be modified only by written
agreement signed by the party against whom any amendment is to be enforced.
13. Choice Of Law: This Agreement shall be governed by the laws
of the State of California.
14. Partial Invalidity: In the event any provision of this
Agreement is void or unenforceable, the remaining provisions shall continue in
full force and effect.
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15. Waiver: No waiver of any breach of this Agreement shall
constitute a waiver of any subsequent breach.
16. Complete Agreement: This Agreement contains the entire
agreement between the parties, and supersedes any and all prior and
contemporaneous oral and written agreements, including Deal's previous
employment contracts, which shall have no further force and effect.
XXXX JO DEAL
__________________________________ Dated: _______________________
HYCOR BIOMEDICAL INC.
By:_______________________________ Dated: _______________________
Name: Xxxxxxx X. Xxxxxx, Ph.D.
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Title: Chairman, President & CEO
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EXHIBIT A
CALIFORNIA LABOR CODE SECTION 2870
EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RENTS
(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of her or her rights in an
invention to her or her employer shall not apply to an invention that the
employee developed entirely on her or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice of
the invention to the employer's business, or actual or
demonstrably anticipated research or development of the employer;
or
(2) Result from any work performed by the employee for the
employer.
(b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from
being required to be assigned under subdivision (a), the provision
is against the public policy of this state and is unenforceable.
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