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EXHIBIT 10.1
FIRST AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This First Amended and Restated Employment
Agreement ("Agreement") is entered into December 21, 2006, but not
to take effect until the Effective Date (as defined in Section 1(d)
below) by and between L. Michael Cutrer, an individual
("Executive), and North American Scientific, Inc., a Delaware
corporation (the "Company").
WHEREAS, Executive and the Company currently are
parties to an Employment Agreement dated April 1, 2002 ("2002
Employment Agreement");
WHEREAS, the parties have agreed that the Company
will seek to hire a new President and Chief Executive Officer ("new
CEO");
WHEREAS, until such time as the Company hires a
new CEO, Executive will continue as the Company’s President
and Chief Executive Officer under the terms of the 2002 Employment
Agreement;
WHEREAS, upon the hire of the new CEO,
Executive’s role and employment relationship will change and
will be governed by the terms and conditions contained in this
Agreement;
NOW, THEREFORE, in consideration of the mutual
promises contained below, the parties agree as follows:
1. Employment by the Company and
Term.
(a) Position.
At the time the Company hires a new CEO, and subject
to the terms herein, Executive shall assume the position of and the
Company agrees to employ Executive as Executive Vice President and
Chief Technology Officer, and in such other executive capacities as
may be requested from time to time by the new CEO or his or her
successor ("CEO"), the Company’s Board of Directors
("Board"), or a duly authorized committee thereof, and Executive
hereby accepts such employment. Executive shall render such other
services for the Company and entities controlled by, under common
control with or controlling, directly or indirectly, the Company,
and to successor entities and assignees of the Company ("Company
Affiliates") as the Company may from time to time reasonably
request and as shall be consistent with the duties Executive is to
perform for the Company and with Executive’s experience.
During the term of his employment with the Company, Executive will
devote his full time and use his best efforts to advance the
business and welfare of the Company, and will not engage in any
other employment or business activities for any direct or indirect
remuneration that would be directly harmful or detrimental to, or
that may compete with, the business and affairs of the Company, or
that would interfere with his duties hereunder.
(b) Duties.
Executive shall serve in an executive capacity and
shall assist the new CEO in his or her transition to the Company as
requested and perform such duties as may be assigned from time to
time by the CEO or the Board.
(c) Company
Policies. The employment relationship between
the parties shall be governed by the general employment policies
and practices of the Company, including but not limited to those
relating to protection of confidential information and assignment
of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company’s general employment
policies or practices, this Agreement shall control.
(d) Term . This Agreement shall become effective on the day the new CEO
commences employment with the Company ("Effective Date").
Thereafter, Executive’s employment shall be at-will, and
either party may terminate such employment at any time, for any
reason, with or without notice, subject to the terms of Section 6
below ("Term"). Executive acknowledges that certain provisions of
this Agreement, including without limitation Sections 7, 8 and 9,
survive termination of employment and termination of this
Agreement.
2. Compensation and Benefits.
(a) Salary.
Effective on the Effective Date, Executive shall
receive for services rendered hereunder a salary at a rate of Two
Hundred and Eighty Thousand Dollars ($280,000.00) per annum,
payable in accordance with Company’s policies and practices
for payment of salary to salaried employees (the "Base Salary").
The Base Salary will be reviewed by and shall be subject to
adjustment at the sole discretion of the Company’s
Compensation Committee each fiscal year during the term of
Executive’s employment based on recommendation of the CEO;
provided, however, that at a minimum Base Salary shall be adjusted
each fiscal year in an amount equal to the change during the
preceding twelve (12) months in the Consumer Price Index for All
Urban Consumers (CPI—U), U.S. city average. The initial
salary review will be conducted no later than twelve (12) months
after the Effective Date and on an annual basis
thereafter.
(b) Participation in
Benefits Plans. During the term hereof,
Executive shall be entitled to participate in any group insurance,
hospitalization, medical, dental, health, accident, disability or
similar plan or program of the Company now existing or established
hereafter to the extent that he is eligible under the general
provisions thereof. The Company may terminate or modify any such
benefit plan or program, provided that to the extent reasonably
possible, the Company shall not terminate such benefits without
providing Executive a minimum of 30 days notice of the termination
of such benefits as described herein. Executive shall also
participate in all fringe benefits offered generally by the Company
to its executives.
(c) Vacation.
Executive shall be entitled to a period of annual
vacation time equal to five (5) weeks per twelve month period, to
accrue pro rata during the course of
each such twelve month period. The days selected for
Executive’s vacation must be mutually and reasonably
agreeable to Company and Executive. In no event shall
Executive’s total accrued vacation exceed seven (7) weeks.
Whenever Executive’s total accrued vacation has reached the
maximum of seven (7) weeks, Executive will stop accruing any
further vacation and will only resume accruing vacation when and to
the extent the Executive’s total accrued vacation is reduced
below the maximum of seven (7) weeks.
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(d) Deductions.
All compensation to be paid to Executive under any
provision of this Agreement or otherwise shall be subject to such
deductions as authorized or required by law.
3. Bonuses.
(a) Annual Bonuses.
Through the Agreement’s Termination Date (as
defined in Section 6 below), Executive will be eligible to receive
a bonus (the "Annual Bonus"). Executive will be deemed to have
earned his bonus in full on October 31, of the Company’s
fiscal year with respect to which the bonus is determined (the
"Measuring Year"), regardless of the date of determination or
payment of the bonus, The amount of the bonus will be determined
pursuant to the terms of this Agreement by the Board or the
Compensation Committee thereof on or about the January 15 following
the last day of the Measuring Year. The Annual Bonus will be based
on performance goals and approved by the Board or the Compensation
Committee thereof and established by the Board or the Compensation
Committee thereof in consultation with the CEO and the Executive
("Performance Goals"). The Executive shall be entitled to an Annual
Bonus of not less than 25% of his Base Salary if the Company and
Executive meet or exceed the Performance Goals established for the
pertinent Measuring Year.
(b) Other Bonus
Plans. From time to time, the Board may, in its
discretion, institute supplementary bonus plans or stock option
plans, for which Executive may be eligible. The terms of such
benefits shall be determined by the applicable plan.
4. Stock Options.
The Company may grant Executive certain incentive
and non—qualified stock options ("Options") in accordance
with the Company’s annual stock option grants. All options
granted to Executive prior to the Effective Date will continue to
vest during the Term of employment under this Agreement, in
accordance with the terms of such grants.
5. Reasonable Business
Expenses and Support. Executive shall be
reimbursed for documented and reasonable business expenses in
connection with the performance of his duties hereunder. Executive
shall be furnished reasonable office space, assistance and
facilities suitable to and appropriate for his position and
responsibilities.
6. Termination of
Employment. The date on which Executive’s
employment by the Company ceases for any reason, whether voluntary
or involuntary, shall be defined herein as the "Termination
Date."
(a) Termination Date On
or Before October 31, 2007 .
(i) If, on or
before October 31, 2007, (a) the Company terminates
Executive’s employment for any reason other than
Executive’s death, Disability or Cause, or (b) Executive
resigns for Good Reason, the Company will continue to pay Executive
his Base Salary in effect on the Termination Date through October
31, 2007 in accordance with the Company’s standard payroll
practices for salaried employees.
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(ii) Definition of
Cause. "Cause" means the occurrence or
existence of any of the following with respect to Executive, as
determined by a majority of the disinterested directors of the
Board: (a) continued failure to substantially perform of
Executive’s duties or responsibilities as determined by the
Company’s Board, provided that the Company has given
Executive written notice specifying the basis upon which the
Company determined that Executive’s duties or
responsibilities were not substantially performed, which remains
uncorrected by the Executive after the lapse of 30 days following
receipt of the written notice; (b) a material breach by Executive
of any of his material obligations hereunder which remains uncured
after the lapse of 30 days following the date that the Company has
given Executive written notice thereof; (c) a material breach by
the Executive of his duty not to engage in any transaction that
represents, directly or indirectly, self—dealing with the
Company or any of its Affiliates which has not been approved by a
majority of the disinterested directors of the Board or of the
terms of his employment, if in any such case such material breach
remains uncured after the lapse of 30 days following the date that
the Company has given the Executive written notice thereof; (d) the
repeated material breach by the Executive of any material duty
referred to in clause (b) or (c) above as to which at least one (1)
written notice has been given pursuant to such clause (b) or (c);
(e) any act of misappropriation, embezzlement, intentional fraud or
similar conduct involving the Company or any of its Affiliates; (f)
the violation of any federal, state
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