EXHIBIT 10.10
STENTOR, INC.
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July 21, 2003
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Stentor, Inc.
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RE: EMPLOYMENT AGREEMENT
Dear Guy:
This letter agreement (this "AGREEMENT") reflects the modified employment terms
under which Stentor, Inc. (the "COMPANY") and you have agreed to continue your
employment.
1. POSITION, DUTIES AND RESPONSIBILITIES. You will continue in your
position as Chief Financial Officer and Treasurer reporting to the Company's
Chief Executive Officer. You will perform the duties customarily associated with
this position and such other duties assigned by the Company. You will work at
the Company's Brisbane, California headquarters. The Company retains the
discretion to modify your position and duties from time to time without a
written modification of this Agreement.
2. COMPENSATION AND EMPLOYEE BENEFITS.
(a) BASE SALARY. Your annual base salary will be $14,583.33 per
month ($175,000.00 annualized), less standard payroll deductions and required
withholdings, paid according to the Company's regular payroll schedule and
procedures. You will be considered for increases in base salary, as determined
in the sole discretion of the Company.
(b) STOCK OPTION GRANT.
All options granted to you pursuant to the Company's 1999 Incentive Stock
Plan (the "PLAN") shall remain in effect, subject to the terms of the Plan and
your stock option agreement and stock option grant notice.
(c) EMPLOYEE BENEFITS. You shall remain eligible for all benefits of
the Company, including paid time off accrual and health and disability benefits,
under the terms and conditions of the standard Company benefits plans which may
be in effect from time to time and provided by the Company to its senior
executive level employees generally. Details about these benefits are set forth
in the summary plan descriptions and other materials available for your
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review. The Company may, in its discretion, modify your compensation and
benefits from time to time, as it deems necessary, and the Company may, in its
discretion, change the level of benefits it provides to employees from time to
time, as it deems advisable for the workforce.
3. OTHER ACTIVITIES DURING EMPLOYMENT; NON-SOLICITATION.
(a) Except with the prior written consent of the Company, you will
not during your employment undertake or engage in any other employment,
occupation or business enterprise. You may engage in civic and not-for-profit
activities so long as such activities do not materially interfere with the
performance of your job duties.
(b) Except as permitted by Section 3(c) below, during your
employment you agree not to acquire, assume or participate in, directly or
indirectly, any position, investment or interest known by you to be adverse or
antagonistic to the Company, or its business or prospects, financial or
otherwise.
(c) During the term of your employment by the Company, except on
behalf of the Company, you will not directly or indirectly, whether as an
officer, director, employee, stockholder, partner, proprietor, associate,
representative, consultant, or in any capacity whatsoever engage in, become
financially interested in, be employed by or have any business connection with
any other person, corporation, firm, partnership, or other entity which
develops, licenses, distributes and/or markets software and/or systems for the
management of digital medical images, which could be either stand-alone systems
or integrated into broader systems, including, but not limited to, Picture
Archiving and Communications Systems, image display systems, image distribution
systems and/or image archiving systems, anywhere in the world, provided,
however, that anything above to the contrary notwithstanding, you may (x) own,
as a passive investor, securities of any entity, so long as your direct holdings
in any one such corporation do not in the aggregate constitute more than one
percent (1%) of the voting stock of such corporation, and (y) work for an entity
that engages in the prohibited activity set forth above if: (1) you work in a
separate and distinct business department, division or unit that does not
directly or indirectly engage in such prohibited activity; (2) you do not
provide services for the benefit of or support the business department, division
or unit that engages in such prohibited activity; and (3) you do not directly or
indirectly provide information on the Company's business to the business
department, division or unit that engages in such prohibited activity.
(d) You acknowledge that because of your position in the Company,
you will have access to material intellectual property and confidential
information. During the term of your employment by the Company and for one (1)
year thereafter, in addition to your other obligations hereunder or under the
Proprietary Information Agreement (as defined below), you shall not, for
yourself or any third party, directly or indirectly:
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(i) divert or attempt to divert from the Company any business
of any kind, including without limitation the solicitation of or interference
with any of its customers, clients, members, business partners or suppliers, or
(ii) solicit or otherwise induce any person employed by the
Company to terminate his or her employment.
4. COMPANY POLICIES; PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT.
As a Company employee, you will be expected to abide by Company rules and
policies. As a further condition of your continued employment, you agree to
continue to abide by your obligations under that certain Employee Proprietary
Information and Inventions Agreement ("PROPRIETARY INFORMATION AGREEMENT")
between you and the Company, signed by you on September 3, 2002.
5. AT-WILL EMPLOYMENT RELATIONSHIP; OTHER TERMINATIONS.
(a) AT-WILL EMPLOYMENT. Your employment with the Company shall be
"at will" at all times. Either you or the Company may terminate the employment
relationship at any time, with or without Cause (as defined below) or advance
notice. Upon and after such termination, all obligations of the Company under
this Agreement shall cease, unless the Company terminates you without Cause (as
defined below), in which case the Company will provide you with the Severance
Benefits as described in Section 6.
(b) DEATH. Your employment shall terminate automatically upon your
death. The Company shall pay to your beneficiaries or estate, as appropriate,
any compensation then due and owing. Thereafter all obligations of the Company
under this Agreement shall cease. Nothing in this Section shall affect any
entitlement of your heirs or devisees to the benefits of any life insurance plan
or other applicable benefits.
(c) DISABILITY. If you become eligible for the Company's long term
disability benefits or if, in the sole opinion of the Company, you are unable to
carry out the responsibilities and functions of the position held by you by
reason of any physical or mental impairment for more than ninety (90)
consecutive days or more than one hundred and twenty days in any twelve-month
period, then, to the extent permitted by law, the Company may terminate your
employment. The Company shall pay to you all compensation to which you are
entitled up through the date of termination, and thereafter all obligations of
the Company under this Agreement shall cease. Nothing in this Section shall
affect your rights under any disability plan in which you are a participant.
6. SEVERANCE BENEFITS FOR TERMINATION WITHOUT CAUSE. If the Company
terminates your employment without Cause (as defined below), as determined in
good faith by the Board, within one (1) year from the date you sign this
Agreement, provided that you execute and deliver the Release Agreement, attached
hereto as Exhibit A (the "RELEASE AGREEMENT") in
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accordance with Section 6(d) and such Release Agreement is not revoked, you will
receive the following as your sole severance benefits (collectively, the
"SEVERANCE BENEFITS"):
(a) SALARY CONTINUATION. You will continue to receive your base
salary at the same rate in effect as of the termination effective date, paid on
the Company's standard payroll dates for the Severance Period (as defined
below), subject to standard payroll deductions and required withholdings.
(b) COBRA PREMIUMS. If you timely elect to continue your Company-
provided group health insurance coverage pursuant to the federal COBRA law, the
Company will reimburse you for the cost of such COBRA premiums so that you may
continue health insurance coverage, at the same level you maintain as of the
employment termination date, through the end of the Severance Period, or until
such time as you qualify for health insurance benefits through a new employer,
whichever occurs first, as follows: (i) reimbursement for 100% of your COBRA
premiums and (ii) reimbursement for 60% of your eligible dependents' COBRA
premiums.
(c) STOCK OPTION ACCELERATION. Vesting of your stock option shall be
accelerated so that those shares that would have vested during the Severance
Period had you remained employed will be deemed to be fully vested and
exercisable on the employment termination date. All other unvested shares shall
terminate on the employment termination date. Vested shares shall be subject to
exercise in accordance with the Plan and your stock option agreement and stock
option grant notice.
(d) RELEASE AGREEMENT. As a condition of and prior to the Company's
provision of any of the Severance Benefits set forth in Sections 6(a) through
(c), you must execute, deliver and make effective the Release Agreement
(attached as Exhibit A) on or after the employment termination date. In the
event you revoke any part of the Release Agreement, the Company will not provide
any of the Severance Benefits to you.
(e) DEFINITION OF CAUSE. For purposes of this Agreement, "CAUSE"
means the occurrence of any one or more of the following: (i) your conviction
of, or plea of guilty or no contest with respect to, any felony or crime
involving fraud, dishonesty, physical harm or moral turpitude; (ii) your
participation in a fraud or act of dishonesty against the Company that results
in material harm to the business of the Company; (iii) your intentional,
material breach of any contract or agreement between you and the Company,
including but not limited to this Agreement and your Proprietary Information
Agreement, or your breach of any statutory duty that you owe to the Company, but
only if you do not correct such breach within thirty (30) days after written
notice thereof has been provided to you; (iv) your commission of an act of
unlawful harassment or discrimination; (v) your willful refusal to implement or
follow a lawful policy or directive of the Company or the Board, but only if you
do not correct such action within thirty (30) days after written notice thereof
has been provided to you, or (vi) a demonstrated and
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continued pattern of your substantial nonperformance of employment (other than
due to your illness or because the requested conduct would subject you to
criminal penalties or would violate applicable federal, state or local law,
ordinance or regulation), occurring after the date of this Agreement, as
determined by the Board in good faith, but only if you do not correct such
nonperformance within thirty (30) days after a written notice has been provided
to you that identifies your acts of substantial nonperformance of your duties,
and, provided further, that the Board's determination of substantial
nonperformance of your employment duties shall not be based on any of your acts
or omissions as an employee of the Company prior to the date of this Agreement.
(f) DEFINITION OF SEVERANCE PERIOD. For purposes of this Agreement,
the "SEVERANCE PERIOD" is defined as the period from the date your employment is
terminated through the one-year anniversary of the date you sign this Agreement.
(g) AGREEMENT TO CONSULT. As a condition of receiving the Severance
Benefits, during the Severance Period, you promise to make yourself reasonably
available to assist the Company with the transition of your responsibilities and
to consult with the Company on matters related to your responsibilities during
your employment. The Company's requests, if any, under this Section 6(g) will be
reasonable and will take into account your work schedule, if any, and other time
commitments, so as not to interfere with your ability to maintain subsequent
employment during the Severance Period.
7. TERMINATION OF SEVERANCE BENEFITS. The Company's obligations, and
your rights to Severance Benefits pursuant to Sections 6(a) through (c) shall
cease and be rendered a nullity immediately in the event that during the
Severance Period you:
(a) breach your obligations under your Proprietary Information
Agreement or this Agreement, including without limitation the obligations set
forth in Section 3; or
(b) directly or indirectly, whether as an officer, director,
employee, stockholder, partner, proprietor, associate, representative,
consultant, or in any capacity whatsoever engage in, become financially
interested in, be employed by or have any business connection with any
stand-alone business, or any business residing within a corporation or any other
entity, which develops, licenses, distributes and/or markets software and/or
systems for the management of digital medical images, which could be either
stand-alone systems or integrated into broader systems, including, but not
limited to, Picture Archiving and Communications Systems, image display systems,
image distribution systems and/or image archiving systems, anywhere in the
world; provided, however, that anything above to the contrary notwithstanding,
you may you may (x) own, as a passive investor, securities of any entity, so
long as your direct holdings in any one such corporation do not in the aggregate
constitute more than one percent (1%) of the voting stock of such corporation,
and (y) work for an entity that engages in the prohibited activity set forth
above if: (1) you work in a separate and distinct business department,
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division or unit that does not directly or indirectly engage in such prohibited
activity; (2) you do not provide services for the benefit of or support the
business department, division or unit that engages in such prohibited activity;
and (3) you do not directly or indirectly provide information on the Company's
business to the business department, division or unit that engages in such
prohibited activity.
8. TERMINATION OBLIGATIONS.
(a) RESIGNATION AND COOPERATION. Upon termination of your
employment, you shall be deemed to have resigned from all offices and
directorships then held with the Company. Following any termination of
employment, you shall cooperate with the Company in the winding up of pending
work on behalf of the Company and the orderly transfer of work to other
employees. You shall also cooperate with the Company in the defense of any
action brought by any third party against the Company that relates to your
employment by the Company.
(b) CONTINUING OBLIGATIONS. You acknowledge, understand and agree
that your obligations under Section 3(d) (Non-Solicitation), Section 7
(Termination of Benefits), Section 8 (Termination Obligations) and Section 9
(Arbitration) shall survive the termination of your employment for any reason
and the termination of this Agreement.
9. ARBITRATION. Concurrent with the execution and delivery of this
Agreement, you shall execute and deliver, and be bound by, the Arbitration
Agreement which is attached as Exhibit B.
10. ASSIGNMENT; BINDING EFFECT.
(a) ASSIGNMENT. Your performance hereunder is personal, and you
agree that you shall have no right to assign and shall not assign or purport to
assign any rights or obligations under this Agreement. This Agreement may be
assigned or transferred by the Company; and nothing in this Agreement shall
prevent the consolidation, merger or sale of the Company or a sale of any or all
or substantially all of its assets.
(b) BINDING EFFECT. Subject to the foregoing restriction on
assignment by you, this Agreement shall inure to the benefit of and be binding
upon each of the parties; the affiliates, officers, directors, agents,
successors and assigns of the Company; and your heirs, devisees, spouse, legal
representatives and successors.
11. NOTICES. All notices or other communications required or permitted
hereunder shall be made in writing and shall be deemed to have been duly given
if delivered: (a) by hand; (b) by a nationally recognized overnight courier
service; or (c) by United States first class registered or certified mail,
return receipt requested, to the principal address of the other party, as set
forth below. The date of notice shall be deemed to be the earlier of (i) actual
receipt of notice
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by any permitted means, or (ii) five business days following dispatch by
overnight delivery service or the United States Mail. You shall be obligated to
notify the Company in writing of any change in your address. Notice of change of
address shall be effective only when done in accordance with this paragraph.
Company's notice address:
Stentor, Inc.
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Your notice address:
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12. COMPLETE AGREEMENT. This Agreement, including Exhibits A and B, and
your Proprietary Information Agreement, constitute the complete, final and
exclusive embodiment of your employment agreement with the Company. In entering
into this Agreement, neither party is relying upon any promise or
representation, written or oral, on any subject concerning the Company or
concerning your employment with the Company other than those expressly contained
or referenced as applicable herein. This Agreement supersedes that certain offer
letter agreement between you and the Company, that certain At-Will Employment
Agreement dated September 3, 2002, between you and the Company, and, except as
stated herein, any other agreements or promises made to you by anyone, whether
oral or written. This Agreement may not be amended or modified except by a
written instrument signed by you and a duly authorized officer of the Company.
This Agreement will be construed and interpreted in accordance with the laws of
the State of California. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. Any invalid or unenforceable provision shall be
modified so as to render valid and enforceable in a manner consistent with the
intent of the parties insofar as possible. This Agreement may be delivered by
telefacsimile and may be executed in any number of counterparts, each of which
shall be deemed an original of this Agreement, but all of which together shall
constitute one and the same agreement.
[Signature page follows]
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13. ACKNOWLEDGEMENT. YOU ACKNOWLEDGE THAT YOU HAVE HAD THE OPPORTUNITY
TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT YOU HAVE READ AND
UNDERSTANDS THIS AGREEMENT, THAT YOU ARE FULLY AWARE OF ITS LEGAL EFFECT, AND
THAT YOU HAVE ENTERED INTO IT FREELY BASED ON YOUR OWN JUDGMENT AND NOT ON ANY
REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.
Sincerely,
STENTOR, INC.
By: /s/ Oran Muduroglu
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Oran Muduroglu
Chief Executive Officer
ACCEPTED AND AGREED:
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DATE: JULY 21, 2003
