EXHIBIT 10.1
July 17 , 2007
Xx. Xxx Xxxxxxxxx
RE: YOUR EMPLOYMENT WITH ALPHA INNOTECH
Dear Xxx,
This letter will set forth the binding agreement of employment (the
"AGREEMENT"), effective as of July 17, 2007 (the "EFFECTIVE DATE"), between you
and Alpha Innotech, a Delaware Corporation ("ALPHA INNOTECH" or the "Company").
1. EMPLOYMENT AND DUTIES During the Employment Term, as defined in Section
3 below, you will serve as Chief Executive Officer and Chief Financial Officer
of ALPHA INNOTECH. You will have such duties and authority as are customary for,
and commensurate with such positions, and such other reasonable duties and
authority as the Board of Directors of ALPHA INNOTECH (the "Board") of ALPHA
INNOTECH prescribes from time to time.
2. COMPENSATION
(a) SALARY For your services hereunder, ALPHA INNOTECH will pay as
salary to you the amount of $190,000.00 per year during the Employment Term,
subject to adjustment as set forth below. Such salary will be paid in conformity
with ALPHA INNOTECH's normal payroll period and will be retroactive to December
1, 2006. Your salary will be reviewed by the Board from time to time at their
discretion, and you will receive such salary adjustments, if any, as they in
their sole discretion determine.
(b) BONUS In addition to the salary set forth in Section 2(a)
hereof, you will be eligible for an annual bonus of $100,000, to be divided and
paid on a quarterly basis as determined pursuant to a formula and criteria
established by the Board of Directors and/or its Compensation Committee, which
formula and criteria will be communicated to you in writing reasonably in
advance of the commencement of the performance period to which such bonus will
relate. Your bonus will be reviewed by the Board from time to time at their
discretion, and you will receive such bonus adjustments, if any, as they in
their sole discretion determine.
(c) OTHER BENEFITS You will be entitled to participate in and
receive benefits under ALPHA INNOTECH's standard benefits plans as in effect
from time to time, including medical insurance, sick leave, and vacation time,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans and ALPHA INNOTECH policies. You will also receive
a monthly car allowance in the amount of $800 retroactive to December 1, 2006
which will continue so long as you serve in the capacity described in Section 1.
(d) EXPENSES During the term of your employment hereunder, you
will be entitled to receive prompt reimbursement from ALPHA INNOTECH for all
reasonable business-related expenses incurred by you, in accordance with ALPHA
INNOTECH's policies and procedures as in effect from time to time, provided that
you will properly account for such business expenses in accordance with ALPHA
INNOTECH's policy.
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(e) DEDUCTIONS AND WITHHOLDING All amounts payable or which become
payable under any provision of this Agreement will be subject to any deductions
authorized in writing by you and any deductions and withholdings required by
law.
3. TERM OF EMPLOYMENT
(a) TERM This Agreement will continue in full force and effect
from and including the Effective Date until terminated as hereinafter provided
(the "EMPLOYMENT TERM") or replaced by another such agreement as may be mutually
agreed upon in writing by all parties.
(b) TERMINATION Your employment with ALPHA INNOTECH under this
Agreement may be terminated by the Board of ALPHA INNOTECH at any time, for any
reason and with or without Cause (as defined below), upon delivery of written
notice by ALPHA INNOTECH. ALPHA INNOTECH is not required to give you any advance
notice of termination which, in the sole discretion of ALPHA INNOTECH, may be
effective immediately upon delivery of written notice to you. You may terminate
this Agreement at any time by giving ALPHA INNOTECH written notice of your
resignation at least 30 days in advance; provided, however, that the Board may
determine upon receipt of such notice that the effective date of such
resignation will be immediate or some time prior to the expiration of the notice
period stated in your written notice to ALPHA INNOTECH.
For purposes of this Agreement, termination for "CAUSE" will include,
without limitation, termination because of your (a) failure or a refusal to
comply in any material respect with the reasonable policies, standards or
regulations of the Company; (b) unprofessional, unethical or fraudulent conduct
or conduct that materially discredits the Company or is materially detrimental
to the reputation, character or standing of the Company; (c) dishonest conduct
or a deliberate attempt to do an injury to the Company; (d) material breach of a
term of this Agreement or the Employee Invention Assignment and Confidentiality
Agreement, including, without limitation, your theft of the Company's
proprietary information; or (e) an unlawful or criminal act which would reflect
badly on the Company in the Company's reasonable judgment.
4. PAYMENTS AND BENEFITS AFTER TERMINATION OF EMPLOYMENT IN THE ABSENCE OF
A CORPORATE TRANSACTION
(a) TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION Upon
termination of your employment by ALPHA INNOTECH for Cause or upon your
voluntary termination of employment pursuant to Section 3(b) above and except as
provided in Section 4(d) or as a result of a Construction Termination Event (as
defined in Section 5 below), all salary and benefits hereunder will cease
immediately. Any previously granted options, to the extent vested and
exercisable on the date of termination, may be exercised in accordance with the
terms of the stock option agreement for such options.
(b) TERMINATION AS A RESULT OF DEATH OR DISABILITY Upon
termination of your employment by ALPHA INNOTECH as a result of death or
Disability (as defined below) and, if
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you are physically and mentally able to do so, subject to your executing ALPHA
INNOTECH's standard form of release agreement releasing any claims you may have
against ALPHA INNOTECH, all outstanding stock options and restricted stock shall
be vested immediately in full and all stock options shall be fully exercisable
for a period of one (1) year following such a termination, and you will receive
one-quarter (1/4th) of your annual target bonus as is in effect under the
provisions of Section 2(b).
For purposes of this Agreement, "Disability" shall mean by reason of
injury, illness or other physical or mental impairment you are (i) completely
unable to perform your services hereunder for more than three consecutive
months, or (ii) unable in the good faith judgment of the Board to perform your
services hereunder for 50% or more of the normal working day throughout six
consecutive months.
(c) INVOLUNTARY TERMINATION WITHOUT CAUSE, DEATH OR DISABILITY
Except as provided in Section 5 below, following involuntary termination of your
employment by ALPHA INNOTECH without Cause and not as a result of death or
Disability and subject to your executing ALPHA INNOTECH's standard form of
release agreement releasing any claims you may have against ALPHA INNOTECH, you
will receive:
(i) Your current salary continued at the rate in effect
immediately prior to your termination for three (3) months plus one (1) month
for every three (3) months employed after October 1, 2006 up to a maximum of
nine (9) months salary continuation.
(ii) Medical insurance and life insurance at the levels in
effect at the time of termination for the period determined in Section 4(c)(i)
above;
(iii) Half of your current annual target bonus as
determined in Section 2(b) above;
(iv) An additional twelve (12) months of vesting of any
stock options and restricted stock granted to you by ALPHA INNOTECH, followed by
a 90 day period during which any such options may be exercised.
(v) No further continuance of other benefits such as
vacation, sick leave, and employee stock purchase plan participation, car
allowance, etc. unless specified herein.
(d) VOLUNTARY TERMINATION IN THE EVENT OF POSITION OR
RESPONSIBILITY CHANGE Except as provided in Section 5 below, if: (A) your
aggregate benefits are materially reduced (as such reduction and materiality are
determined by customary practice within the high technology industry within the
State of California) below those currently in effect; and/or (B) your duties
and/or authority are materially decreased or increased from those exercised by
you as Chief Executive Officer in a way that is adverse to you, as determined by
customary practice within the high technology industry within the State of
California, such duties and authority including but not limited to (1) direct
management responsibility for all corporate sales, marketing, finance,
operations, quality and product development; or (2) reporting directly into the
Board of Directors; or (3) full profit and loss responsibility for the surviving
entity; and/or (C) you are required to perform your employment obligations
(other than routine travel consistent with your current
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position) at a location more than fifteen (15) miles away from your principal
place of work for ALPHA INNOTECH as is your current such place of work and
subject to your executing ALPHA INNOTECH's standard form of release agreement
releasing any claims you may have against ALPHA INNOTECH, and if you voluntarily
resign, provided that you provide the Company with written notice of the acts or
omissions constituting grounds for a termination under this Section 4(d) within
ninety (90) days of the initial existence of the grounds for a termination under
this Section 4(d) and a reasonable cure period of not less than thirty (30) days
following the date of such notice, you will receive:
(i) Your current salary continued at the rate in effect
immediately prior to your termination for four (4) months;
(ii) Medical insurance and life insurance at the levels in
effect at the time of termination for the period determined in Section 4(c)(i)
above;
(iii) Half of your current annual target bonus as
determined in Section 2(b) above;
(iv) An additional twelve (12) months of vesting of any
stock options and restricted stock granted to you by ALPHA INNOTECH, followed by
a 90 day period during which any such options may be exercised.
(vi) No further continuance of other benefits such as
vacation, sick leave, and employee stock purchase plan participation, car
allowance, etc. unless specified herein.
5. PAYMENTS AND BENEFITS AFTER TERMINATION OF EMPLOYMENT FOLLOWING A
CORPORATE TRANSACTION
(a) DEFINITIONS For purposes of this Section 5:
(i) A "CORPORATE TRANSACTION" is defined as (A) a merger
or acquisition in which the Company is not the surviving entity (except for a
merger of the Company into a wholly-owned subsidiary, and except for a
transaction the purpose of which is to change the State in which the Company is
incorporated), (B) the sale, transfer or other disposition of all or
substantially all of the assets of the Company or (C) any other corporate
reorganization or business combination, in which the beneficial ownership of 50%
or more of the Company's outstanding voting stock is transferred.
(ii) The "POST-TRANSACTION PERIOD" is defined as
commencing on the date of the closing or effectiveness of a Corporate
Transaction and ending nine (9) months following the closing or effectiveness of
a Corporate Transaction.
(iii) A "CONSTRUCTIVE TERMINATION EVENT" will be deemed to
have occurred at ALPHA INNOTECH's close of business on the thirtieth (30th)
calendar day after written notice from you that one or more of the following
actions have been taken by the surviving entity and such action(s) are not
reversed in full by the surviving entity within such thirty-day period unless
prior to the expiration of such thirty-day period you have otherwise agreed to
the specific relevant event in writing and provided that you have given the
Company such written notice of the acts or omissions
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constituting grounds for a Constructive Termination within ninety (90) days of
the initial existence of the grounds for the Constructive Termination: (A) your
aggregate benefits are materially reduced (as such reduction and materiality are
determined by customary practice within the high technology industry within the
State of California) below those in effect immediately prior to the effective
date of such Constructive Termination Event, and/or (B) your duties and/or
authority are materially decreased or increased from those exercised by you as
Chief Executive Officer immediately prior to such Constructive Termination
Event, in a way that is adverse to you, as determined by customary practice
within the high technology industry within the State of California, such duties
and authority including but not limited to (1) direct management responsibility
for all corporate sales, marketing, finance, operations, quality and product
development; or (2) reporting directly into the Board of Directors of the
surviving entity; or (3) full profit and loss responsibility for the surviving
entity; or (4) a seat on the Board of Directors of the surviving entity; and/or
(C) you are required to perform your employment obligations (other than routine
travel consistent with that prior to the effective date of such Constructive
Termination Event) at a location more than fifteen (15) miles away from your
principal place of work for the surviving entity as such place of work was in
effect immediately prior to the effective date of such Constructive Termination
Event.
(b) SEVERANCE PAY FOR TERMINATION AFTER COMMENCEMENT OF THE POST
TRANSACTION PERIOD If at any time during the Post Transaction Period your
employment is terminated by the surviving entity except for Cause, death or
Disability, or if a Constructive Termination Event as defined above occurs and
you voluntarily terminate your employment and subject to your executing the
surviving entity's standard form of release agreement releasing any claims you
may have against ALPHA INNOTECH or the surviving entity, then you will receive:
(i) Your salary continued at the rate in effect on the
date of termination for nine (9) months;
(ii) Medical insurance and life insurance at the levels in
effect at the time of termination for nine (9) months;
(iii) Your annual target bonus as determined in section
2(b) above;;
(iv) No further continuance of other benefits such as
vacation, sick leave, and employee stock purchase plan participation, car
allowance, etc. unless specified herein.
(c) COOPERATION After any such termination of your employment,
except to the extent you are not able to do so by reason of your death or
Disability, you will cooperate with the surviving entity in providing for the
orderly transition of your duties and responsibilities to other individuals, as
is reasonably requested by the surviving entity.
6. ACCELERATION OF STOCK OPTIONS FOLLOWING A CORPORATE TRANSACTION
Immediately upon the occurrence of a Corporate Transaction as defined above, all
stock options and restricted stock which has been granted to you as of the date
of such occurrence shall become 100% vested and such options shall be
exercisable pursuant to the terms of your stock option agreement.
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7. PROPRIETARY RIGHTS You hereby acknowledge and confirm that you have
executed the Company's standard Employee Invention Assignment and
Confidentiality Agreement with the Company, which agreement is in full force and
effect. The provisions of such agreement will survive any termination or
expiration of this Agreement.
8. MISCELLANEOUS This Agreement contains the entire understanding and sole
and entire agreement between the parties with respect to the subject matter
hereof, and supersedes any and all prior agreements, negotiations and
discussions between the parties hereto with respect to the subject matter
covered hereby and may only be modified by an agreement in writing signed by
ALPHA INNOTECH and you, and which states the intent of the parties to amend this
Agreement. If any provision of this Agreement is held to be invalid or otherwise
unenforceable, in whole or in part, the remainder of such provision and the
remainder of this Agreement will not be affected thereby and will be enforced to
the fullest extent permitted by law. Neither this Agreement nor the rights or
obligations hereunder will be assignable by you. ALPHA INNOTECH may assign this
Agreement to any successor of ALPHA INNOTECH, and upon such assignment any such
successor will be deemed substituted for ALPHA INNOTECH upon the terms and
subject to the conditions hereof. This Agreement will be binding upon the
successors and assigns of the parties hereof and upon your heirs, executors and
administrators. This Agreement has been negotiated and executed in, and will be
governed by and construed with the laws of, the State of California. Any notice,
request, demand or other communication required or permitted hereunder will be
deemed to be properly given when personally served in writing, or when deposited
in the United States mail, postage pre-paid, addressed to ALPHA INNOTECH at the
address shown at the beginning of this letter, or to you at the address shown
below, or by facsimile upon confirmation of receipt. Each party hereto may
change its address by written notice in accordance with this Section 8.
9. CODE SECTION 409A If as of the relevant date(s), the Company in good
faith determines that you are a "specified employee" and that the benefits
hereunder constitute "deferred compensation" (in each case as such terms are
defined under Section 409A of the Internal Revenue Code of 1986, as amended (the
"CODE") or other later-issued IRS or Treasury guidance) (the "DEFERRED
COMPENSATION SEPARATION BENEFITS"), no severance amount shall be payable to you
pursuant hereto prior to the earlier of (i) your death following termination of
employment, or (ii) the date that is six (6) months following the date of your
"separation from service" with the Company (within the meaning of Code Section
409A). Any portion of the Deferred Compensation Separation Benefits the payment
of which is delayed pursuant to the foregoing sentence shall accrue and, to the
extent such portion of the Deferred Compensation Separation Benefits would
otherwise have been payable within the first six (6) months following your
termination of employment, will become payable on the first payroll date that
occurs on or after the date six (6) months and one (1) day following the date of
your termination of employment. All subsequent Deferred Compensation Separation
Benefits, if any, will be payable in accordance with the payment schedule
applicable to each payment or benefit set forth in this Agreement.
Sincerely,
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
Chairman
Alpha Innotech Corp Board of Directors
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ACCEPTED AND AGREED:
/s/ Xxx Xxxxxxxxx
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Xxx Xxxxxxxxx
Date signed: July 17, 2007
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