EXHIBIT 10.1
IRIS INTERNATIONAL, INC. ("IRIS")
SECOND AMENDMENT
TO
KEY EMPLOYEE AGREEMENT FOR CESAR M. GARCIA
IRIS INTERNATIONAL, INC., a Delaware corporation (the "COMPANY") agrees
with you to amend the Key Employee Agreement for Cesar M. Garcia, as amended by
that certain First Amendment to Key Employee Agreement (as amended, the
"AGREEMENT") as follows, effective as of November 14, 2007:
1. Section 3.7 of the Agreement is deleted in its entirety and replaced
by the following:
"3.7 In the event that (i) you are terminated without cause at
any time, pursuant to Section 2.2(c) hereof and (ii) you deliver to the Company
a signed settlement agreement and general release in the form attached hereto as
Exhibit A (the "Release") and satisfy all conditions to make the Release
effective, the Company shall pay you the following: (a) an amount that does not
exceed two times the maximum amount that may be taken into account under a
qualified plan pursuant to section 401(a)(17) of the Internal Revenue Code (the
"Code") for the year in which such termination occurs; and (b) an amount that is
the difference between eighteen months of base salary (based on the monthly rate
of base salary in effect immediately prior to such termination) and the amount
determined under subsection (a), above; provided, however, that in no event
shall the sum of the amounts computed under subsections (a) and (b), above,
exceed eighteen months of base salary (based on the monthly rate of base salary
in effect immediately prior to such termination). At the choice of the Company,
payment of the amount computed under subsection (a) may be made in the form of a
lump sum payment within ten (10) days of the termination or through regular
payroll payments in equal amounts for a period that begins in the month of
termination and ends no later than eighteen (18) months after the month of
termination, and payment of the amount computed under subsection (b) may be made
in the form of a lump sum payment within ten (10) days of the termination or
through regular payroll payments in equal amounts for a period that begins in
the month of termination and ends no later than the 15th day of the third month
of the calendar year following the year in which you are terminated. The parties
intend that the compensation payable pursuant to subsection (b) above shall be
treated as a short-term deferral as that term is used in section 409A of the
Code and the regulations promulgated thereunder (collectively, "SECTION 409A").
The parties intend that each of the payments payable pursuant to (a) above shall
be treated as a separate payment for purposes of section 409A and excluded from
the definition of "deferred compensation" pursuant to the regulations
promulgated thereunder regarding separation pay payable upon an involuntary
separation from service. If the amount computed under subsection (a) or (b) is
made through regular payroll payments, the Company shall maintain your medical
and dental insurance benefits in accordance with those in effect for employees
at the time of such termination, but only for the longer of the two periods
during which such payments are to be made through regular payroll. Termination
without cause shall include "constructive termination" in the event of (i) a
material diminution of your authority, duties or responsibilities as described
in SECTION 1 above, (ii) a material breach of this Agreement by the Company, or
(iii) the termination by you of your employment with the Company at any time
within 30 days following the relocation of your primary office to a location
more than 60 miles from your current office in Chatsworth, California; provided
that before any constructive termination occurs, you first give the Company
notice of the event or other circumstances giving rise to such constructive
termination within 90 days of the occurrence thereof and afford the Company the
right to cure the event or other circumstances giving rise to such constructive
termination for a period of 30 days following the Company's receipt of such
notice."
2. Section 11 of the Agreement is deleted in its entirety and replaced
by the following:
"11. COMPLETE AGREEMENT; AMENDMENTS. The foregoing, together
with the Proprietary Information Agreement and Addendum 1, is the entire
agreement of the parties with respect to the subject matter hereof and thereof
and may not be amended, supplemented, canceled or discharged except by written
instrument executed by both parties hereto."
3. The Agreement is amended by adding a new Exhibit A in the form
attached hereto as Exhibit A.
4. This agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
IRIS INTERNATIONAL, INC.
By: /s/ Richard H. Williams
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Richard H. Williams, Chairman
By: /s/ Dr. Richard Nadeau
------------------------------
Dr. Richard Nadeau, Chairman
of the Compensation Committee
Date: November 14, 2007
Accepted and agreed this
14th day of November, 2007.
/s/ Cesar M. Garcia
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Cesar M. Garcia
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EXHIBIT A
[IRIS LETTERHEAD]
RELEASE
[DATE]
EMPLOYEE NAME
ADDRESS
RE: SEPARATION TERMS AND GENERAL RELEASE AGREEMENT
Dear [NAME]:
This letter confirms the terms of your separation from the employment of IRIS
International, Inc. and consideration in exchange for your waiver and general
release of claims in favor of IRIS International, Inc. and its officers,
directors, employees, agents, representatives, subsidiaries, divisions,
affiliated companies, successors, and assigns (collectively, the "COMPANY" or
"IRIS").
1. TERMINATION DATE. Your employment with the Company will end
effective _____________ (the "TERMINATION DATE"). Between now and the
Termination Date, you should assist with any transition-related activities as
directed by the employee to whom you directly report.
2. ACKNOWLEDGMENT OF PAYMENT OF WAGES. On or before execution of this
release, we delivered to you a final paycheck that includes payment for all
accrued wages, salary, accrued and unused vacation time, reimbursable expenses,
and any similar payments due and owing to you from the Company as of the
Termination Date (collectively referred to as "WAGES"). You are entitled to
these Wages regardless of whether you sign this Separation Terms and General
Release Agreement (the "AGREEMENT").
3. CONSIDERATION FOR RELEASE. In consideration of the waiver and
release of claims set forth in Paragraphs 7 and 8 below, and in exchange for
your signing this Agreement, the Company agrees to provide you with the
post-termination payments (the "SEVERANCE PAYMENTS") described in Section 3.7 of
that certain IRIS International, Inc. Key Employee Agreement for Cesar M.
Garcia, as amended to date (the "IRIS OFFER LETTER"). The Severance Payments are
in addition to any amounts owed to you by the Company. You acknowledge and agree
that you are not otherwise entitled to receive the Severance Payments. You
understand that if you do not sign the Agreement, or if you revoke the signed
Agreement as described in Paragraph 19 below (if applicable), the Company has no
obligation to provide you with the Severance Payments.
4. COBRA CONTINUATION COVERAGE. Your Company provided health coverage
will end on your Termination Date. If you are eligible for, and timely elect
COBRA continuation, you may continue health coverage pursuant to the terms and
conditions of COBRA at your own expense. Our Human Resources Department will
contact you shortly after your Termination Date. All other insured benefit
coverage (e.g., life insurance, disability insurance) will also end on your
Termination Date.
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5. RETURN OF COMPANY PROPERTY. By signing below, you represent that you
have returned all the Company property and data of any type whatsoever that was
in your possession or control.
6. CONFIDENTIAL INFORMATION. You hereby acknowledge that as a result of
your employment with the Company you have had access to the Company's
confidential information. You acknowledge your continuing obligations under the
Employee Confidentiality Agreement you have previously executed, and you agree
you will hold all such confidential information in strictest confidence and that
you may not make any use of such confidential information. You further confirm
that you have delivered to the Company all documents and data of any nature
containing or pertaining to such Confidential Information and that you have not
taken with you any such documents or data or any copies thereof.
7. GENERAL RELEASE AND WAIVER OF CLAIMS.
7.1. The payments and agreements set forth in this Agreement
fully satisfy any and all accrued salary, vacation pay, bonus and
commission pay, stock-based compensation, profit sharing, termination
benefits or other compensation to which you may be entitled by virtue
of your employment with the Company or your termination of employment.
You acknowledge that you have no claims and have not filed any claims
against the Company based on your employment with or the separation of
your employment with the Company.
7.2. To the fullest extent permitted by law, you hereby
release and forever discharge the Company, its successors, subsidiaries
and affiliates, directors, shareholders, current and former officers,
agents and employees (all of whom are collectively referred to as
"RELEASEES") from any and all existing claims, demands, causes of
action, damages and liabilities, known or unknown, that you ever had,
now have or may claim to have had arising out of or relating in any way
to your employment or separation from employment with the Company
including, without limitation, claims based on any oral, written or
implied employment agreement, claims for wages, bonuses, commissions,
stock-based compensation, expense reimbursement, and any claims that
the terms of your employment with the Company, or the circumstances of
your separation, were wrongful, in breach of any obligation of the
Company or in violation of any of your rights, contractual, statutory
or otherwise. Each of the Releasees is intended to be a third party
beneficiary of the General Release and Waiver of Claims set forth in
this Paragraph 7.
(a) RELEASE OF STATUTORY AND COMMON LAW CLAIMS. Such
rights include, but are not limited to, your rights under the
following federal and state statutes: the Employee Retirement
Income Security Act (ERISA) (regarding employee benefits); the
Occupational Safety and Health Act (safety matters); the
Family and Medical Leave Act of 1993; the Worker Adjustment
and Retraining Act ("WARN") (notification requirements for
employers who are curtailing or closing an operation) and
common law; tort; wrongful discharge; public policy; workers'
compensation retaliation; tortious interference with
contractual relations, misrepresentation, fraud, loss of
consortium; slander, libel, defamation, intentional or
negligent infliction of emotional distress; claims for wages,
bonuses, commissions, stock-based compensation or fringe
benefits; vacation pay; sick pay; insurance reimbursement,
medical expenses, and the like.
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(b) RELEASE OF DISCRIMINATION CLAIMS. You understand
that various federal, state and local laws prohibit age, sex,
race, disability, benefits, pension, health and other forms of
discrimination, harassment and retaliation, and that these
laws can be enforced through the U.S. Equal Employment
Opportunity Commission, the National Labor Relations Board,
the Department of Labor, and similar state and local agencies
and federal and state courts. You understand that if you
believe your treatment by the Company violated any laws, you
have the right to consult with these agencies and to file a
charge with them. Instead, you have decided voluntarily to
enter into this Agreement, release the claims and waive the
right to recover any amounts to which you may have been
entitled under such laws, including but not limited to, any
claims you may have based on age or under the Age
Discrimination in Employment Act of 1967 (ADEA; 29 U.S.C.
Section 621 et. seq.) (age); the Older Workers Benefit
Protection Act ("OWBPA") (age); Title VII of the Civil Rights
Act of 1964 (race, color, religion, national origin or sex);
the 1991 Civil Rights Act; the Vocational Rehabilitation Act
of 1973 (disability); The Americans with Disabilities Act of
1990 (disability); 42 U.S.C. Section 1981, 1986 and 1988
(race); the Equal Pay Act of 1963 (prohibits pay differentials
based on sex); the Immigration Reform and Control Act of 1986;
Executive Order 11246 (race, color, religion, sex or national
origin); Executive Order 11141 (age); Vietnam Era Veterans
Readjustment Assistance Act of 1974 (Vietnam era veterans and
disabled veterans); and California state statutes and local
laws of similar effect.
7.3. Releasees and you do not intend to release claims (i)
which you may not release as a matter of law (including, but not
limited to, indemnification claims under applicable law); (ii) for
unemployment, state disability and/or paid family leave insurance
benefits pursuant to the terms of applicable state law; (iii) for any
benefit entitlements that are vested as of the Termination Date
pursuant to the terms of a Company-sponsored benefit plan governed by
the federal law known as "ERISA"; and (iv) for vested stock and/or
vested option shares pursuant to the written terms and conditions of
your existing stock and stock option grants and agreements existing as
of the Termination Date. To the fullest extent permitted by law, any
dispute regarding the scope of this general release shall be determined
by an arbitrator under the procedures set forth in paragraph 12.
8. WAIVER OF UNKNOWN CLAIMS. You expressly waive any benefits of
Section 1542 of the Civil Code of the State of California (and any other laws of
similar effect), which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR."
9. COVENANT NOT TO SUE.
9.1. To the fullest extent permitted by law, you agree that
you will not now or at any time in the future pursue any charge, claim,
or action of any kind, nature and character whatsoever against any of
the Releasees, or cause or knowingly permit any such charge, claim or
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action to be pursued, in any federal, state or municipal court,
administrative agency, arbitral forum, or other tribunal, arising out
of any of the matters covered by paragraphs 7 and 8 above.
9.2. You further agree that you will not pursue, join,
participate, encourage, or directly or indirectly assist in the pursuit
of any legal claims against the Releasees, whether the claims are
brought on your own behalf or on behalf of any other person or entity.
9.3. Nothing in this paragraph shall prohibit you from: (1)
providing truthful testimony in response to a subpoena or other
compulsory legal process, and/or (2) filing a charge or complaint with
a government agency such as the Equal Employment Opportunity
Commission, the National Labor Relations Board or applicable state
anti-discrimination agency.
10. NON-DISPARAGEMENT. You agree that you will not make any statement,
written or oral, or engage in any conduct that is or could reasonably be
construed to be disparaging of the Company or its products, services, agents,
representatives, directors, officers, shareholders, attorneys, employees,
vendors, affiliates, successors or assigns, or any person acting by, through,
under or in concert with any of them. Nothing in this paragraph shall prohibit
you from providing truthful testimony in response to a subpoena or other
compulsory legal process.
11. LEGAL AND EQUITABLE REMEDIES. You and the Company agree that either
party shall have the right to enforce this Agreement and any of its provisions
by injunction, specific performance or other equitable relief without prejudice
to any other rights or remedies that either party may have at law or in equity
for breach of this Agreement.
12. ARBITRATION OF DISPUTES. Except for claims for injunctive relief
arising out of a breach of the Employee Confidentiality Agreement, you and the
Company agree to submit to mandatory binding arbitration any future disputes
between you and the Company, including any claim arising out of or relating to
this Agreement. By signing below, you and the Company waive any rights you and
the Company may have to trial by jury of any such claims. You agree that the
American Arbitration Association will administer any such arbitration(s) under
its National Rules for the Resolution of Employment Disputes, with
administrative and arbitrator's fees to be borne by the Company. The arbitrator
shall issue a written arbitration decision stating his or her essential findings
and conclusions upon which the award is based. A party's right to review of the
decision is limited to the grounds provided under applicable law. The parties
agree that the arbitration award shall be enforceable in any court having
jurisdiction to enforce this Agreement. This Agreement does not extend or waive
any statutes of limitations or other provisions of law that specify the time
within which a claim must be brought. Notwithstanding the foregoing, each party
retains the right to seek preliminary injunctive relief in a court of competent
jurisdiction to preserve the status quo or prevent irreparable injury before a
matter can be heard in arbitration.
13. ATTORNEYS' FEES. If any legal action arises or is brought to
enforce the terms of this Agreement, the prevailing party shall be entitled to
recover its reasonable attorneys' fees, costs and expenses from the other party,
in addition to any other relief to which such prevailing party may be entitled,
except where the law provides otherwise. The costs and expenses that may be
recovered exclude arbitration fees pursuant to paragraph 12 above.
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14. CONFIDENTIALITY PROVISION. You agree to keep the contents, terms
and conditions of this Agreement confidential and not disclose them except to
your spouse or domestic partner, attorneys, accountant or as required by
subpoena or court order.
15. MATERIALITY OF BREACH. Any breach of the provisions contained in
paragraphs 6 through 10 and/or 14 will be deemed a material breach of this
Agreement.
16. NO ADMISSION OF LIABILITY. You agree that this Agreement is not an
admission or evidence of any wrongdoing or liability on the part of the Company,
its representatives, attorneys, agents, partners, officers, shareholders,
directors, employees, subsidiaries, affiliates, divisions, successors or
assigns. This Agreement will be afforded the maximum protection allowable under
California Evidence Code Section 1152 and/or any other state or Federal
provisions of similar effect.
17. INDEMNIFICATION. This Release shall not apply with respect to any
claims arising under your existing rights to indemnification and defense
pursuant to (a) the articles and bylaws of the Company for acts as a director
and/or officer, (b) any indemnification agreement with IRIS, or (c) your rights
of insurance under any director and officer liability policy in effect covering
the Company's directors and officers.
18. REVIEW OF AGREEMENT. You may not sign this Agreement prior to your
Termination Date. You may take up to twenty-one (21) days from the date you
receive this Agreement, or until your Termination Date, whichever date is later,
to consider this Agreement and release and, by signing below, affirm that you
were advised by this letter to consult with an attorney before signing this
Agreement and were given ample opportunity to do so. You understand that this
Agreement will not become effective until you return the original properly
signed Agreement to IRIS Human Resources, attention: Director of Human
Resources, at the Company's principal executive officers in Chatsworth,
California, and after expiration of the revocation period without revocation by
you.
[IF EMPLOYEE IS OVER 40 AT THE TIME OF TERMINATION, THE FOLLOWING
SECTION 19 APPLIES:
19. REVOCATION OF AGREEMENT. You acknowledge and understand that you
may revoke this Agreement by faxing a written notice of revocation to our Human
Resources Department, Attention Director of Human Resources at (818)
_______________ any time up to seven (7) days after you sign it. After the
revocation period has passed, however, you may no longer revoke your Agreement.
IF EMPLOYEE IS UNDER 40 AT THE TIME OF TERMINATION, THE FOLLOWING
SECTION 19 APPLIES:
19. INTENTIONALLY OMITTED.]
20. ENTIRE AGREEMENT. This Agreement together with the Employee
Confidentiality Agreement that you previously executed is the entire Agreement
between you and the Company with respect to the subject matter of this Agreement
and supersedes all prior negotiations and agreements, whether written or oral,
relating to this subject matter. You acknowledge that neither the Company, nor
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its agents or attorneys, made any promise or representation, express or implied,
written or oral, not contained in this Agreement to induce you to execute this
Agreement. You acknowledge that you have signed this Agreement knowingly,
voluntarily and without coercion, relying only on such promises, representations
and warranties as are contained in this document. You understand that you do not
waive any right or claim that may arise after the date this Agreement is
executed.
21. MODIFICATION. By signing below, you acknowledge your understanding
that this Agreement may not be altered, amended, modified, or otherwise changed
in any respect except by another written agreement that specifically refers to
this Agreement, executed by the Company's authorized representatives and you.
22. GOVERNING LAW. This Agreement is governed by, and is to be
interpreted according to, the laws of the State of California.
23. SAVINGS AND SEVERABILITY CLAUSE. Should any court, arbitrator or
government agency of competent jurisdiction declare or determine any of the
provisions of this Agreement to be illegal, invalid or unenforceable, the
remaining parts, terms or provisions shall not be affected thereby and shall
remain legal, valid and enforceable. Further, it is the intention of the parties
to this Agreement that, if a court, arbitrator or agency concludes that any
claim under paragraph 7 above may not be released as a matter of law, the
General Release in paragraph 7 and the Waiver Of Unknown Claims in paragraph 8
shall otherwise remain effective as to any and all other claims.
If this Agreement accurately sets forth the terms of your separation from the
Company and if you voluntarily agree to accept the terms of the severance
package offered please sign below no earlier than your Termination Date and
return it to the Director of Human Resources.
PLEASE REVIEW CAREFULLY. THIS AGREEMENT CONTAINS
A GENERAL RELEASE OF KNOWN AND UNKNOWN CLAIMS.
Sincerely,
[NAME]
REVIEWED, UNDERSTOOD AND AGREED:
By:
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[NAME]
Date:
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DO NOT SIGN PRIOR TO YOUR TERMINATION DATE
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