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Exhibit
10.18
EXECUTIVE EMPLOYMENT
AGREEMENT
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FLIR
Systems, Inc. |
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(“Company”) |
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27700A SW
Parkway Avenue |
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Wilsonville, Oregon 97070 |
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Stephen
M. Bailey |
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(“Executive”) |
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16740 SW
Pinot Place |
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Hillsboro, Oregon 97123 |
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EFFECTIVE DATE: January 1,
2008
RECITALS:
The 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 the Company.
1.3 “ Cause ”
means Executive committed any one or more of the following:
(i) willful gross misconduct in the performance of any
material duties under this Agreement that results in material
damage to the Company, and if such misconduct is susceptible of
cure, the failure to effect such cure within 30 days after written
notice from the Board and/or the Company’s Chief Executive
Officer of such misconduct is given to Executive;
(ii) material use of alcohol or illegal drugs which materially
interferes with the performance of Executive’s duties
hereunder and materially damages the Company; (iii) theft,
embezzlement, fraud, misappropriation of funds, other willful acts
of dishonesty or the willful and material violation of any material
law, ethical rule or fiduciary duty relating to Executive’s
employment by the Company that materially damages the Company;
(iv) a felony or any act involving moral turpitude;
(v) the willful and material violation of any confidentiality
or proprietary rights agreement between Executive and the Company
that materially damages the Company; or (vi) the willful and
material violation of Company policy or procedure, or breach of any
material provision of this Agreement, that materially damages the
Company, and if such violation or breach is susceptible of cure,
the failure to effect such cure within thirty (30) days after
written notice from the Board and/or Chief Executive Officer of
such violation or breach is given to Executive.
1.4 “ Change of Control
” means a merger or consolidation to which the Company is
a party if the individuals and entities who were stockholders of
the Company immediately prior to the effective date of such merger
or consolidation have beneficial ownership (as defined in Rule
13d-3 under the Securities Exchange Act of 1934) of less than fifty
percent (50%) of the total combined voting power for election
of directors of the surviving corporation immediately following the
effective date of such merger or consolidation.
1.5 “ Disability
” means for purposes of Section 4.4, 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. For purposes of Section 3.3,
Disability means total and permanent disability as defined in
Internal Revenue Code section 22(e)(3).
1.7 “ 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, the Company
hereby employs Executive as Senior Vice President, Finance and
Chief Financial Officer, and Executive accepts such
employment.
2.2 Duties . Executive
shall devote his full-time and best efforts to the Company and to
fulfilling the duties of Chief Financial Officer, which shall
include such duties as may from time to time be assigned him by the
Board and Chief Executive Officer, provided that such duties are
reasonably consistent with Executive’s education, experience
and background. Executive shall comply with the 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
does not conflict with the provisions of this Agreement.
2.3 Term . The term of
this Agreement shall be until January 1, 2010, unless earlier
terminated in accordance with Article IV. This Agreement may
be extended by mutual agreement of the parties.
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ARTICLE III
COMPENSATION AND
EXPENSES
3.1 Base Salary . For all
services rendered under this Agreement during the term of
Executive’s employment, the Company shall pay Executive a
minimum annual Base Salary of $370,000 for 2008 and $400,000 for
2009.
3.2 Bonus . Executive
shall be eligible for bonuses, incentive payments and other awards
as determined by the Board or the Compensation Committee of the
Board in accordance with the FLIR Systems, Inc. 2007 Executive
Bonus Plan then in effect, as amended from time to time.
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. All
such grants, including all past and future grants, shall be subject
to the terms and conditions set forth in the option agreements
between Executive and the Company associated with each such grant.
In the event of any inconsistency between this Agreement and the
option agreements, the terms and conditions of the option grants
shall take precedence.
3.4 Vacation . Executive
shall earn thirty (30) days of personal time off in 2008 and
thirty (30) days of personal time off in 2009. Except as
modified in this Agreement, Executive’s accrual, use of, and
compensation for PTO shall be governed by the terms of FLIR’s
employee handbook for Oregon.
3.5 Benefits . Executive
shall be eligible to participate in all Company-sponsored health
and welfare benefit plans as made available to other executives of
the Company and notwithstanding any provision herein to the
contrary, following termination the Company will pay
Executive’s COBRA premiums for continuation of coverage in
any Company-sponsored group health benefit plans for Executive and
any of Executive’s dependents eligible to participate in the
plans until the earlier of (a) 18 months, (b) such time
as Executive obtains comparable benefits through employment or
otherwise and (c) age 65.
3.6 Supplemental Employee
Retirement Plan . The Company shall make all contributions
to its Supplemental Employee Retirement Plan (“SERP”)
on behalf of Executive for each plan year in accordance with the
SERP then in effect, as amended from time to time.
3.7 Business Expenses .
The 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 the Company, provided that
Executive accounts promptly for such expenses to the Company in the
manner prescribed from time to time by the Company.
3.8 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 payment for
work between two states, Executive’s Base Salary shall be
grossed up to cover the tax consequence to Executive.
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ARTICLE IV
EARLY
TERMINATION
4.1 Early Termination .
This Article sets forth the terms for early termination of this
Executive’s employment with the Company.
4.2 Termination for Cause
. The Company may terminate this Agreement and Executive’s
employment for Cause immediately upon written notice from the Board
and/or the Company’s Chief Executive Officer to Executive. In
the event of termination for Cause pursuant to this
Section 4.2, Executive shall be paid Executive’s Base
Salary through the date of termination at the rate then in effect,
and (without regard to any language that may be inconsistent in any
option grant) for any option granted on or after the date of this
Agreement Executive shall have the lesser of three
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