EXHIBIT 10.1
EMPLOYMENT
AGREEMENT
EMPLOYMENT AGREEMENT
(the “Agreement”) made
as of the 12th day of December, 2005 by and between, Biolase
Technology, Inc. (the “Company”) and Richard L.
Harrison (“Executive”).
WHEREAS , the Company and Executive wish to enter into a
formal employment contract which will govern the terms and
conditions applicable to Executive’s employment with the
Company and will provide certain severance benefits for Executive
in exchange for the Executive’s agreement to abide by the
terms and conditions set forth in this Agreement.
NOW, THEREFORE
, the parties agree as
follows:
PART ONE — TERMS AND
CONDITIONS OF EMPLOYMENT
1. Duties and
Responsibilities .
A. Executive shall serve as the
Chief Financial Officer and Executive Vice President of the Company
and shall in such capacity report directly to the Company’s
President and Chief Executive Officer. As Chief Financial Officer,
Executive shall have primary responsibility for Finance,
Accounting, Information Technology and Human Resources functional
areas.
B. Executive agrees to devote his
full time and attention to the Company, to use his best efforts to
advance the business and welfare of the Company, to render his
services under this Agreement fully, faithfully, diligently,
competently and to the best of his ability, and not to engage in
any other employment activities while employed by the
Company.
2. Period of Employment
. Executive’s employment with the Company shall be
governed by the provisions of this Agreement for the period
commencing December 12, 2005 (“Date of Hire”), and
continuing until this Agreement is terminated in accordance with
the provisions of Paragraph 10. The period during which
Executive’s employment continues in effect shall be
referenced as the “Employment Period.”
3. Cash Compensation
.
A. Executive shall be paid a base
salary at the annual rate of not less than two hundred and thirty
thousand dollars ($230,000) per annum (hereinafter “Base
Salary”) during the Employment Period. Executive’s Base
Salary shall be paid at periodic intervals in accordance with the
Company’s payroll practices for salaried
employees.
B. The Company shall deduct and
withhold from the compensation payable to Executive, including but
not limited to Executive’s Base Salary, any and all
applicable Federal, State and local income and employment
withholding taxes and any other amounts required to be deducted or
withheld by the Company under applicable statutes, regulations,
ordinances or orders governing or requiring the withholding or
deduction of amounts otherwise payable as compensation or wages to
employees.
4. Bonus. Executive
shall be eligible to earn an annual target bonus of one hundred
thousand dollars ($100,000) pursuant to the terms specified in this
Paragraph 4 (the “Target Bonus”). Of the full Target
Bonus, fifty thousand dollars ($50,000) shall be paid to Executive
in quarterly installments of twelve thousand five hundred dollars
($12,500). Executive shall be eligible to earn the remaining fifty
thousand dollars ($50,000) of the Target Bonus based on achievement
of objective or subjective criteria established by the
Company’s Board of Directors (the
“Board”).
5. Equity
Compensation. On the Date of Hire, the Company shall grant
Executive a non-qualified option to purchase two hundred and fifty
thousand (250,000) shares of the Company’s common stock
(the “Option Shares”). The Option Shares shall be
granted pursuant to the terms of the Company’s 2002 Stock
Option Incentive Plan, as amended (the
“Plan”).
A. Vesting of Option
Shares. The Option Shares will be governed by a separate
Stock Option Agreement and the Plan. The per share exercise price
of the Option Shares will be equal to the per share fair market
value of the common stock on the date of grant, as determined by
the Board. The Option Shares shall vest over a three (3) year
period so long as Executive provides continuous service to the
Company in accordance with the Plan, with one third (1/3) of
the Option Shares becoming vested upon Executive’s completion
of twelve (12) months of continuous service measured from the
Date of Hire and one eighth (1/8) of the remaining Option
Shares vesting upon the Executive’s completion of each
additional quarterly period of employment thereafter, measured from
the first anniversary of the Date of Hire.
B. Accelerated Vesting of
Option Shares. Upon a Change of Control, as defined in this
Paragraph 5. B., each of Executive’s unvested Option Shares
will become fully vested. “Change of Control” shall
mean the (i) merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities are
transferred to a person or persons different from the persons
holding those securities immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Company’s assets in complete
liquidation or dissolution of the Company.
6. Fringe Benefits
.
A. Executive shall, throughout the
Employment Period, be eligible to participate in any and all group
term life insurance plans, group health plans, accidental death and
dismemberment plans and short-term disability programs and other
executive perquisites which are made available to the
Company’s executives and for which Executive
qualifies.
B. Executive shall earn and accrue
vacation time during the Employment Period in an amount of no less
than four (4) weeks of vacation annually, subject to periodic
review by the Company. Executive may accrue a maximum of one and
one half (1 1 / 2
) times) the annual
vacation entitlement. Once this maximum has been reached, all
further accruals will cease. Vacation accruals will recommence
after Executive has taken vacation and his accrued hours have
dropped below the accrual maximum. Executive will not earn vacation
during any unpaid leaves. Executive agrees that he shall take any
accrued vacation he may have at such times as are mutually
convenient to Executive and the Company (as determined by
the
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President and Chief Executive Office and/or the
Board). Executive also agrees that he shall take any accrued
vacation in whole-day increments to the extent practicable. If a
recognized holiday falls during Executive’s vacation period,
it will not be considered as a vacation day.
C. Executive shall be provided an
automobile allowance of one thousand dollars ($1,000) per month to
compensate Executive for any and all expenses associated with
Executive’s maintenance, use, and insurance of an automobile
for any Company business-related purpose.
D. During the Employment Period,
Executive shall be authorized to incur necessary and reasonable
travel, entertainment and other business expenses in connection
with his duties hereunder. The Company shall reimburse Executive
for such expenses upon presentation of an itemized account and
appropriate supporting documentation.
7. Restrictive Covenants
. During the Employment Period:
A. Executive shall devote
Executive’s full time and energy solely and exclusively to
the performance of Executive’s duties, except during periods
of illness or vacation periods.
B. Executive shall not directly or
indirectly provide services to or through any person, firm or other
entity except the Company, unless otherwise authorized by the Board
in writing. However, Executive may continue to serve during the
Employment Period as a non-employee member of the board of
directors of any companies for which he so serves on the effective
date of this Agreement and may join the board of directors of other
companies in the future with the Board’s written
consent.
C. Executive shall not render any
services of any kind or character for Executive’s own account
or for any other person, firm or entity without first obtaining the
written consent of each of the Company’s Board members.
However, Executive shall have the right to perform such incidental
services as are necessary in connection with
(i) Executive’s private passive investments, but only if
Executive is not obligated or required to (and shall not in fact)
devote any managerial efforts which interfere with the services
required to be performed by him, or (ii) Executive’s
charitable or community activities, or participation in trade or
professional organizations, but only if such incidental services do
not interfere with the performance of Executive’s
services.
8. Non-Competition .
During any period for which Executive is receiving payments from
the Company, either pursuant to Paragraphs 3 and 4 of this Part One
or Paragraphs 11 and 12 of Part Two of this Agreement, Executive
shall not directly or indirectly:
A. own, manage, operate, join,
control or participate in the ownership, management, operation or
control of, or be employed by or connected in any manner with, any
enterprise which is engaged in any business competitive with or
similar to that of the Company; provided , however, that
such restriction shall not apply to any passive investment
representing an interest of less than two percent (2%) of an
outstanding class of publicly-traded securities of any corporation
or other enterprise which is not, at the time of such investment,
engaged in a business competitive with the Company’s
business; or
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B. encourage or solicit, either
directly or indirectly, and on behalf of himself and/or any other
individual and/or third party, any of the Company’s employees
to leave the Corporation’s employ for any reason or interfere
in any other manner with employment relationships at the time
existing between the Company and its employees; or
C. solicit any client, either
directly or indirectly, and on behalf of himself and/or any other
individual and/or third party, of the Company (whose identity is,
and/or about whom Executive has confidential information, which
rises to the level of a “trade secret” within the
meaning of the Uniform Trade Secrets Act (“UTSA”)) for
purposes of inducing said client(s) to terminate its existing
business relationship with the Company or interfere in any other
manner with any existing business relationship between the Company
and such client(s).
Executive acknowledg
