EXHIBIT 10.22
EXECUTIVE EMPLOYMENT AGREEMENT
PARTIES: FLIR Systems, Inc. ("Company")
00000 X.X. 00xx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Xxxx Xxxxx ("Executive")
00 Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
EFFECTIVE DATE: January 1, 2002
RECITALS:
Company wishes to obtain the services of Executive for the duration of this
Agreement, and the Executive wishes to provide his services for such period, all
upon the terms and conditions set forth in this Agreement.
Therefore, in consideration of the mutual promises contained herein, the parties
agree as follows:
ARTICLE I
DEFINITIONS
-----------
1.1 "Base Salary" means regular cash compensation paid on a periodic basis
exclusive of benefits, bonuses or incentive payments.
1.2 "Board" means the Board of Directors of Company.
1.3 "Cause" means Executive committed any one or more of the following: (i) the
repeated failure to perform any material duties under this Agreement or
negligence of Executive in the performance of such duties, and if such failure
or negligence is susceptible of cure, the failure to effect such cure within 30
days after written notice of such failure or negligence is given to Executive;
(ii) use of alcohol or illegal drugs which interferes with the performance of
Executive's duties hereunder; (iii) theft, embezzlement, fraud, misappropriation
of funds, other acts of dishonesty or the violation of any law, ethical rule or
fiduciary duty relating to Executive's employment by Company; (iv) a felony or
any act involving moral turpitude; (v) the violation of any confidentiality or
proprietary rights agreement between Executive and Company, or (vi) the
violation of Company policy or procedure, or the breach of any material
provision of this Agreement, and if such violation or breach is susceptible of
cure, the failure to effect such cure within 30 days after written notice of
such breach is given to Executive.
1.4 "Disability" means the inability of Executive to perform his duties under
this Agreement, with or without reasonable accommodation, because of physical or
mental incapacity for a continuous period of five (5) months, as determined by
the Board.
1.5 "FLIR" shall mean FLIR Systems, Inc., and its wholly owned subsidiaries.
ARTICLE II
EMPLOYMENT, DUTIES AND TERM
---------------------------
2.1 Employment. Upon the terms and conditions set forth in this Agreement,
Company hereby employs Executive as President and Chief Executive Officer, and
Executive accepts such employment. Except as expressly provided herein,
termination of this Agreement by either party shall also terminate Executive's
employment by Company.
2.2 Duties. Executive shall devote his full-time and best efforts to Company and
to fulfilling the duties of President and Chief Executive Officer, which shall
include such duties as may from time to time be assigned him by the Board,
provided that such duties are reasonably consistent with Executive's education,
experience and background. Executive shall comply with Company's policies and
procedures to the extent they are not inconsistent with this Agreement in which
case the provisions of this Agreement prevail. Executive shall also be permitted
to serve on outside boards, commissions and partnerships to the extent such
service to does not conflict with the provisions of this Agreement.
2.3 Term. The term of this Agreement shall be until January 1, 2004, unless
earlier terminated in accordance with Article IV. This Agreement may be extended
by mutual agreement of the parties.
ARTICLE III
COMPENSATION AND EXPENSES
-------------------------
3.1 Base Salary. For all services rendered under this Agreement during the term
of Executive's employment, Company shall pay Executive a minimum annual Base
Salary of $400,000 for 2002 and $500,000 for 2003.
3.2 Bonus. Executive shall be eligible for an annual Bonus of up to one hundred
percent (100%) of Executive's Base Salary, based upon the achievement of
objectives agreed upon by the Board.
2
3.3 Stock Options. Executive shall annually be eligible for grants of options to
purchase shares of FLIR stock, based upon achievement of objectives and for such
quantity of options as determined by the Board.
3.4 Vacation. Executive shall have four weeks of paid vacation annually.
3.5 Benefits. Executive shall be eligible to participate in all
Company-sponsored health and welfare benefit plans made available to other
executives of the Company (medical, dental, 401K, etc.).
3.6 Supplemental Employee Retirement Plan. Company shall make all contributions
to its Supplemental Employee Retirement Plan on behalf of Executive for each
Plan year based on Executive's total compensation for that year. For purposes of
calculating the amount of such annual contribution, Executive's annual
compensation shall include all bonuses earned for that year.
3.7 Housing and Relocation. Company shall pay for reasonable housing for
Executive's use while in Portland. In the event Executive elects to relocate
from Boston to Portland, Company shall pay Executive's moving expenses.
3.8 Automobile. Company shall pay for an automobile for Executive's use while in
Portland.
3.9 Travel Expenses. Company shall pay for reasonable travel expenses for
Executive and his wife between Boston and Portland.
3.10 Business Expenses. Company shall, in accordance with, and to the extent of,
its policies in effect from time to time, bear all ordinary and necessary
business expenses reasonably incurred by Executive in performing his duties as
an employee of Company, provided that Executive accounts promptly for such
expenses to Company in the manner prescribed from time to time by Company.
3.11 Taxes and Withholding. All amounts payable to Executive under this
Agreement shall be net of amounts required to be withheld by law. To the extent
there is any tax consequence to Executive in connection with the provision of
housing or payment for work between two states, Executive's Base Salary shall be
grossed up to cover the tax consequence to Executive.
3
ARTICLE IV
EARLY TERMINATION
-----------------
4.1 Early Termination. This Article sets forth the terms for early termination
of this Agreement.
4.2 Termination for Cause. Company may terminate this Agreement for Cause
immediately upon written notice to Executive. In the event of termination for
Cause pursuant to this Section 4.2, Executive shall be paid at the then current
rate of Executive's Base Salary through the date of termination.
4.3 Termination Without Cause. Either Executive or Company may terminate this
Agreement and Executive's employment without Cause on no less than 30 days'
written notice. In the event Executive terminates this Agreement without Cause
pursuant to this Section 4.3, Executive shall be paid his base salary through
the date of termination. In the event Company terminates Executive without Cause
pursuant to this Section 4.3, Company shall pay to Executive either an amount
equal to Executive Base Salary in effect at the time of termination for a period
of eighteen months, or for the duration of the remaining term of the Agreement,
whichever is greater. Further, in the event Company terminates Executive without
Cause pursuant to this Section 4.3, all options granted to Executive shall
immediately vest and Executive shall have a period of one year within which to
exercise those options. Executive shall also be entitled to a prorated portion
of the annual bonus to be paid for that year as determined by the Board.
4.4 Termination in the Event of Death or Disability. This Agreement shall
terminate in the event of death or disability of Executive.
(a) In the event of Executive's death, Company shall pay all accrued wages owing
through the date of termination, plus an amount equal to one years' Base Salary.
Such amount shall be paid (1) to the beneficiary or beneficiaries designated in
writing to Company by Executive, (2) in the absence of such designation, to the
surviving spouse, or (3) if there is no surviving spouse, or such surviving
spouse disclaims all or any part, then the full amount, or such disclaimed
portion, shall be paid to the executor, administrator or other personal
representative of Executive's estate. The amount shall be paid as a lump sum as
soon as practicable following Company's receipt of notice of Executive's death.
(b) In the event of Disability, Base Salary shall be paid through the final day
of the fifth month referenced in the definition of "Disability."
4.5 Entire Termination Payment. The compensation provided for in this Article IV
shall constitute Executive's sole remedy for termination pursuant to this
Article. Executive shall not be entitled to any other termination or severance
payment which may
4
be payable to Executive under any other agreement between Executive and Company
or under any policy in effect at, preceding or following the date of
termination.
4.6 Moving Expenses. Upon termination of this Agreement pursuant to either
Sections 4.2, 4.3 or 4.4, Company shall pay all of Executive's moving expenses
from Portland to Boston, or to any other location designated by Executive.
ARTICLE V
CONFLICT OF INTEREST
--------------------
5.1 During the term of employment with Company, Executive will engage in no
activity or employment which may conflict with the interest of Company, and will
comply with Company's policies and guidelines pertaining to business conduct and
ethics.
ARTICLE VI
GENERAL PROVISIONS
------------------
6.1 Successors and Assigns. Except as otherwise provided in Article VI, This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns, administrators, executors, legatees,
and heirs. In that this Agreement is a personal services contract, it shall not
be assigned by Executive.
6.2 Notices. All notices, requests and demands given to or made pursuant hereto
shall, except as otherwise specified herein, be in writing and be delivered or
mailed to any such party at its address as set forth at the beginning of this
Agreement. Either party may change its address, by notice to the other party
given in the manner set forth in this Section. Any notice, if mailed properly
addressed, postage prepaid, registered or certified mail, shall be deemed
dispatched on the registered date or that stamped on the certified mail receipt,
and shall be deemed received within the third business day thereafter or when it
is actually received, whichever is sooner.
6.3 Caption. The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
6.4 Governing Law and Jurisdiction. The validity, construction and performance
of this Agreement shall be governed by the laws of the State of Oregon, which
shall be the exclusive jurisdiction for any action to interpret or enforce this
Agreement.
5
6.5 Mediation. In the case of any dispute arising under this Agreement which
cannot be settled by reasonable discussion, the parties agree that, prior to
commencing any proceeding, they will first engage the services of a professional
mediator agreed upon by the parties and attempt in good faith to resolve the
dispute through confidential nonbinding mediation. Each party shall bear
one-half (1/2) of the mediator's fees and expenses and shall pay all of its own
attorneys' fees and expenses related to the mediation. This Section 6.5 shall
not apply to any action to enforce Executive's obligations under a
confidentiality or proprietary rights agreement.
6.6 Attorney Fees. In the event of any suit, action or arbitration to interpret
or enforce this Agreement, the prevailing party shall be entitled to recover its
attorney fees, costs and out-of-pocket expenses at trial and on appeal.
6.7 Construction. Wherever 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 Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
6.8 Waivers. No failure on the part of either party to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right or
remedy granted hereby or by any related document or by law.
6.9 Modification. This Agreement may not be and shall not be modified or amended
except by written instrument signed by the parties hereto.
6.10 Entire Agreement. This Agreement constitutes the entire agreement between
the parties and supersedes all prior or contemporaneous oral or written
understandings, statements, representations or promises with respect to its
subject matter. This Agreement was the subject of negotiation between the
parties and, therefore, the parties agree that the rule of construction
requiring that the agreement be construed against the drafter shall not apply to
the interpretation of this agreement.
XXXX X. XXXXX FLIR SYSTEMS, INC.
/s/ XXXX X. XXXXX By: /s/ XXXX X. XXXX
--------------------------- --------------------------------------
Title: Chairman of the Compensation Committee
--------------------------------------
6
