-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GePMWZdhkl73+1vSXeQYtKMIeSpHgyJgptwXgPTb6CcnmTB30m3ET8Jd1nT2wyQT uC+/uqdy3DHKMj/I3ZzzuQ== 0001170918-06-000468.txt : 20060517 0001170918-06-000468.hdr.sgml : 20060517 20060516193027 ACCESSION NUMBER: 0001170918-06-000468 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20060509 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060517 DATE AS OF CHANGE: 20060516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IRIS INTERNATIONAL INC CENTRAL INDEX KEY: 0000319240 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 942579751 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11181 FILM NUMBER: 06847463 BUSINESS ADDRESS: STREET 1: 9162 ETON AVE CITY: CHATSWORTH STATE: CA ZIP: 91311 BUSINESS PHONE: 8187091244 MAIL ADDRESS: STREET 1: 9162 ETON AVENUE CITY: CHATSWORTH STATE: CA ZIP: 91311 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL REMOTE IMAGING SYSTEMS INC /DE/ DATE OF NAME CHANGE: 19920703 8-K 1 fm8k-051606.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): May 9, 2006 IRIS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) DELAWARE 1-11181 94-2579751 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 9172 ETON AVENUE CHATSWORTH, CA 91311 (Address of Principal Executive Offices/Zip Code) (818) 709-1244 (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (SEE General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange ct (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c)) under the Exchange Act (17 CFR 240.13e-4c)) ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT Effective May 11, 2006, in connection with Martin G. Paravato's resignation as our Chief Financial Officer, we and Mr. Paravato entered into an agreement with respect to the terms of his resignation as out Chief Financial Officer and continuing employment relationship with us (the "Separation Agreement"). The Separation Agreement entitles Mr. Paravato to severance in accordance with the terms of his employment agreement in the form of continuation of his base salary from June 1, 2006 through May 31, 2007 and health insurance benefits for Mr. Paravato through the same period. Pursuant to the terms of the Separation Agreement we have also engaged Mr. Paravato to serve us a part-time employee until March 31, 2007. Mr. Paravato has released all claims against us. Effective May 1, 2006, we entered into a Key Employee Agreement with Donald C. Mueller (the "Mueller Employment Agreement"). Pursuant to the terms of the Mueller Employment Agreement, Mr. Mueller agreed to serve as our Corporate Vice President and Chief Financial Officer upon the effectiveness of Mr. Paravato's resignation at an annual salary of $275,000 per year. Upon commencement of his employment by the Company on May 1, 2006, Mr. Mueller received a five-year Incentive Stock Option to purchase 121,000 shares of our common stock pursuant to our 1998 Stock Option Plan, and 14,500 shares of our common stock that are subject to certain repurchase rights and other restrictions. In the event Mr. Mueller is terminated by us without cause, as defined in the Mueller Employment Agreement, he is entitled to severance payments equal to his salary upon termination for a period of twelve (12) months. ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS RESIGNATION OF CURRENT CHIEF FINANCIAL OFFICER Effective May 11, 2006, Martin G. Paravato resigned his position as our Vice President, Chief Financial Officer and Corporate Secretary, which is our principal financial and accounting officer. In connection with his resignation, we and Mr. Paravato entered into an agreement outlining the terms of his resignation. Reference is made to the description of the Separation Agreement under Item 1.01 above, which description is incorporated in this Item 5.02 by this reference. APPOINTMENT OF NEW CHIEF FINANCIAL OFFICER Also effective May 11, 2006, Donald C. Mueller, age 42, was appointed to replace Mr. Paravato as our Chief Financial Officer and will serve as our principal financial and accounting officer. In connection with his appointment, we and Mr. Mueller entered into an employment agreement. Reference is made to the description of the Mueller Employment Agreement under Item 1.01 above, which description is incorporated in this Item 5.02 by this reference. Immediately prior to his employment by us, Mr. Mueller worked as an independent financial consultant. Prior to consulting, Mr. Mueller was employed by Transportation Technologies Industries from 1998 through 2005, and served as Treasurer and Chief Financial Officer of that company from January 2000 through April 2005. There are no understandings or arrangements between Mr. Mueller and any other person pursuant to which Mr. Mueller was selected as Chief Financial Officer. Mr. Mueller does not have any family relationship with any director, executive officer or person nominated or chosen by our Board of Directors to become a director or executive officer. Mr. Mueller joined us as an employee on May 1, 2006, before being appointed as Chief Financial Officer. 2 ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. The following exhibits are filed herewith: EXHIBIT NUMBER DESCRIPTION ------- ----------------------------------------------------- 10.1 Separation Agreement by and between Martin G. Paravato and IRIS International, Inc., dated May 11, 2006. 10.2 Key Employee Agreement by and between Donald Mueller and IRIS International, Inc., dated May 1, 2006. 99.1 Press Release dated May 2, 2006, published by IRIS International, Inc. 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. IRIS INTERNATIONAL, INC. Date: May 16, 2006 By: /S/ CESAR M. GARCIA ------------------------------------- Cesar M. Garcia President and Chief Executive Officer 4 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION - ------- -------------------------------------------------------------------- 10.1 Separation Agreement by and between Martin G. Paravato and IRIS International, Inc., dated May 11, 2006. 10.2 Key Employee Agreement by and between Donald Mueller and IRIS International, Inc., dated May 1, 2006. 99.1 Press Release dated May 2, 2006, published by IRIS International, Inc. 4 EX-99 2 ex99-1m.txt EX-99.1 EXHIBIT 99.1 IRIS ANNOUNCES APPOINTMENT OF DONALD C. MUELLER AS CORPORATE VP AND CHIEF FINANCIAL OFFICER TO SUCCEED RETIRING MARTIN G. PARAVATO CHATSWORTH, Calif.--May 2, 2006--IRIS International, Inc. (NASDAQ: IRIS), a manufacturer and marketer of automated IVD urinalysis systems and medical devices used in hospitals and clinical reference laboratories worldwide, today announced the appointment of Donald C. Mueller as Corporate Vice President and Chief Financial Officer, replacing Martin G. Paravato, who is taking his planned retirement. Mr. Mueller, who will assume his new position May 11, has broad expertise in financial and strategic planning, budget development and management, accounting and financial operations, banking relations and cash management. Mr. Paravato will continue in a consulting capacity with the Company. "Marty Paravato has been an integral part of the new senior management team that successfully transitioned IRIS from a company mostly dependent on a mature, single legacy product distributed in the U.S. to a major international medical device company with multiple products and platforms. In the process, IRIS achieved record revenues and earnings, eliminated all debt, built cash to $19 million at Dec. 31, 2005, and is confident of continuing this trend well into the future. We thank Marty for his contributions and are pleased that he will assist us in a smooth transition," said President and Chief Executive Officer Cesar Garcia. "We are fortunate that in Don Mueller we have a seasoned financial executive with a brilliant record in corporate financial management, one who will provide IRIS ongoing strategic financial guidance and oversight as the Company continues its rapid growth and expansion," said Mr. Garcia. "A hallmark of IRIS' longer range planning has been the continuing addition in all of our business segments of highly credentialed executives with outstanding histories of business successes. Don Mueller exemplifies the type of executive we require to best guide and oversee the rapid and orderly growth of our Company." Mr. Mueller has had more than 20 years of experience in finance and accounting, most recently as Vice President, Chief Financial Officer and Treasurer of Transportation Industries, Inc., a $600 million manufacturer of components for the North American commercial vehicles market, and was instrumental in completing the Company's merger with Accuride Corporation (NYSE:ACW). In his eight years as a senior financial executive at TTI, Mr. Mueller arranged and negotiated $400 million in financing for a management led buyout of the Company in 2000, as well as the refinancing of $265 million in remaining debt in 2003. During his tenure, he also developed restructuring plans and initiated the implementation of Sarbanes-Oxley internal controls. Mr. Mueller's previous corporate finance positions were at Fisher Scientific International, Inc. (NYSE: FSH), from 1993-1998, where he served as Acting Corporate Controller for the multinational company with 30 operating units. In this position, he was responsible for financial planning, corporate consolidation, Securities and Exchange Commission reporting and internal controls. Other positions included Vice President, Finance-Fisher Products Group, with responsibility for financial oversight of 10 manufacturing divisions with annual sales of $300 million, and Vice President, Finance, Fisher Hamilton Inc. Mr. Mueller, 42, a Certified Public Accountant, graduated in 1985 from the University of San Diego with a Bachelor of Business Administration degree, summa cum laude, and began his career as an accountant and audit manager for Deloitte & Touche. THE COMPANY IRIS International, Inc. (www.proiris.com) is a leader in automated urinalysis technology with systems in major medical institutions throughout the world. The Company's newest generation iQ(R)200 Automated Urine Microscopy Analyzer, utilizing image flow cytometry, patented flow microscope technology and neural network-based particle recognition, achieves a significant reduction in the cost and time-consuming steps involved in manual microscopic analysis. The Company's Sample Processing business unit (formerly the StatSpin(R) subsidiary), based in Westwood, Mass., manufactures innovative centrifuges and blood analysis products. Advanced Digital Imaging Research, LLC (ADIR), based near Houston, Texas, is the Company's imaging research and development subsidiary. SAFE HARBOR PROVISION This news release contains forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, the Company's views on future commercial revenues, market growth, capital requirements, and new product introductions, and are generally identified by phrases such as "thinks," "anticipates," "believes," "estimates," "expects," "intends," "plans," and similar words. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially from the forward-looking statement. These statements are based upon, among other things, assumptions made by, and information currently available to, management, including management's own knowledge and assessment of the Company's industry, competition and capital requirements. Other factors and uncertainties that could affect the Company's forward-looking statements include, among other things, the following: the acceptance by customers of our new iQ(R)200 product platform, our substantial expansion of international sales and our reliance on key suppliers, the potential need for changes in long-term strategy in response to future developments; future advances in diagnostic testing methods and procedures, as well as potential changes in government regulations and healthcare policies, both of which could adversely affect the economics of the diagnostic testing procedures automated by the Company's products; rapid technological change in the microelectronics and software industries; and increasing competition from imaging and non-imaging based in-vitro diagnostic products. The Company refers interested persons to its most recent Annual Report on Form 10-K and its other SEC filings for a description of additional uncertainties and factors that may affect forward-looking statements. The Company assumes no duty to update its forward-looking statements. CONTACT: IRIS International, Inc. Cesar Garcia, 818-709-1244 x123 or The Wall Street Group, Inc. Ron Stabiner, 212-888-4848 _______________________________ Source: IRIS International, Inc. 2 EX-10 3 ex10-1b.txt EX-10.1 EXHIBIT 10.1 DATE TO: Cesar Garcia, CEO CC: Audit Committee of the Board - -------------------------------------------------------------------------------- RE: RESIGNATION AS CHIEF FINANCIAL OFFICER Gentlemen: This letter confirms our agreement regarding my change of status with IRIS and my continuing services to the Company after this date. 1. In accordance with my earlier conversations with Cesar Garcia, I have agreed to resign as Vice President, Chief Financial Officer and Corporate Secretary of IRIS International, Inc., and each of its subsidiaries (hereafter "the Company" or "Employer"), effective immediately following the Company's filings of its Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, which filing is anticipated to occur no later than May 10, 2006. I shall continue as a part-time employee to the Company until March 31, 2007 or such other date as we may mutually agree. I shall be compensated at the rate of $200 per hour up to $1,200 per day to assist the Company in any way the Company may reasonably request. The Company's requests for such services shall be reasonable and flexible with respect to my availability; provided that in no event shall I be required to work more than 40 hours in any thirty day period. 2. The Company shall announce my resignation in terms that are not negative to my reputation and that recognize my past contributions to the Company. Any press release(s) related to my departure shall be worked out to the mutual satisfaction of both parties. No press release shall be published or disseminated to the public without my prior approval. 3. In accordance with my employment agreement, and in addition to the amounts set forth in Paragraph 1 above, the Company shall pay me my current salary for a period of twelve (12) months after my resignation, commencing with the month following the effective date of my resignation (hereafter "the Severance Period"). 4. The Company shall also pay me all vested vacation pay, computed through the date of this letter. 5. During the Severance Period, the Company shall maintain and continue to provide me the same healthcare benefit coverage that was in place for me and my family immediately prior to the date of this letter. I shall retain my Laptop PC and my cell phone. 6. I shall have the normal 90 day period to exercise any vested outstanding stock options as of the date I cease being a part-time employee. 7. This letter and the terms and conditions set forth in Exhibit A attached hereto shall constitute the entire agreement between the parties and supersede all prior oral and written negotiations and agreements. 8. I have been allowed a period of at least 21 days to consider the terms of this letter, including the terms attached as Exhibit A, and I have decided to execute this letter in fewer than 21 days with the express understanding that I have been given and declined the opportunity to consider this letter for a full 21 days. I also understand that I may revoke the release contained in Exhibit A with respect to claims under the federal Age Discrimination in Employment Act and the Older Worker's Benefit Protection Act (collectively, the "ADEA"), at any time during the 7 days following the date of execution of this letter, and the release of claims under the ADEA only shall not become effective or enforceable until such revocation period has expired. If you have any questions or comments regarding the terms or conditions contained in this letter or attached Exhibit, please contact me. If this letter confirms our understanding, 2 please indicate the Company's agreement by executing this letter in the space provided and returning an original of the executed copy to me. Very truly yours, /s/ Martin G. Paravato - --------------------------- MARTIN G. PARAVATO ON BEHALF OF IRIS INTERNATIONAL, INC., THE UNDERSIGNED HEREBY COMMITS AND BINDS THE COMPANY TO THE FOREGOING TERMS AND CONDITIONS. DATE: May 11, 2006 IRIS INTERNATIONAL, INC. --------------------------- By: /s/ Cesar Garcia -------------------------------------- CESAR GARCIA President and Chief Executive Officer 3 EXHIBIT A TERMS AND CONDITIONS 1. Employee will comply with the following: a. On or before DATE OF RESIGNATION, Employee will return all Employer keys, files, records, documents, plans, drawings, specifications and equipment concerning the business of Employer, its parent or subsidiary companies, or any related entity, whether prepared by Employee or otherwise coming into Employee's possession or control. b. Employee will not engage in or assist in any litigation against Employer, or any of its subsidiaries or affiliates (including but not limited to IRIS Diagnostics, Advanced Digital Imaging Research, and StatSpin), relating to anything occurring prior to Employee's resignation, unless litigation results from Employee's employment by the Company, or unless compelled to do so by subpoena or other legal process. 2. Other than service as a part-time employee as described in Section 1 above, Employee will not seek reinstatement or re-employment by Employer. 3. a. In exchange for receipt of the consideration provided for above, Employee, on his own behalf, and for Employee's heirs, executors, administrators, successors, and assigns, does hereby fully and forever release and discharge Employer and its affiliated shareholders and subsidiary corporations and related entities, and their shareholders, employees and former employees, agents, directors, officers, attorneys, predecessors, successors, assigns, heirs, executors, administrators, and all other persons, firms, corporations, associations, partnerships, or entities having any legal relationship to any of them, of and from any and all claims, demands, causes of action, charges and grievances, of whatever kind or nature, whether known or unknown, suspected or unsuspected, which Employee now owns or holds or has at any time before the date of his termination owned or held against any of them, including, but not limited to, any and all claims, charges, demands and causes of action: (1) which are alleged in, set forth in, arise out of, or are in any way connected with any transactions, occurrences, acts or omissions or claims; (2) which arise out of or are in any way connected with Employee's employment with Employer or the termination of Employee's employment with Employer on a full-time basis; (3) which are related to or concern (i) violations of any local, state or federal law based on race, sex, age, disability, pregnancy or any other category protected by law, including, but not limited to, the federal Age Discrimination in Employment Act and the Older Worker's Benefit Protection Act; (ii) wrongful termination, breach of express and implied-in-fact contract, breach of the covenant of good faith and fair dealing, 4 intentional and negligent infliction of emotional distress, defamation, invasion of privacy, breach of employment contract, fraud or negligent misrepresentation, intentional interference with contractual relations and prospective economic advantage, and other torts; (4) any claim for wages, benefits, salary, commissions or bonuses; or (5) which arise out of or are in any way connected with any loss, damage or injury whatsoever resulting from any act committed or omission made prior to the Employee's last day of work as a full-time employee of the Company. b. In exchange for receipt of the consideration provided for above, Employer, on its own behalf, and for its administrators, successors, and assigns, does hereby fully and forever release and discharge Employee and his agents, attorneys, predecessors, successors, assigns, heirs, executors, administrators, and all other persons, firms, corporations, associations, partnerships, or entities having any legal relationship to any of them, of and from any and all claims, demands, causes of action, charges and grievances, of whatever kind or nature, whether known or unknown, suspected or unsuspected, which Employer now owns or holds or has at any time before the date of his termination owned or held against any of them, including, but not limited to, any and all claims, charges, demands and causes of action: (1) which are alleged in, set forth in, arise out of, or are in any way connected with any transactions, occurrences, acts or omissions or claims; (2) which arise out of or are in any way connected with Employee's employment with Employer or the termination of Employee's employment with Employer on a full-time basis; (3) which are related to or concern (i) violations of any local, state or federal law based on race, sex, age, disability, pregnancy or any other category protected by law, including, but not limited to, the federal Age Discrimination in Employment Act and the Older Worker's Benefit Protection Act; (ii) wrongful termination, breach of express and implied-in-fact contract, breach of the covenant of good faith and fair dealing, intentional and negligent infliction of emotional distress, defamation, invasion of privacy, breach of employment contract, fraud or negligent misrepresentation, intentional interference with contractual relations and prospective economic advantage, and other torts; (4) any claim for wages, benefits, salary, commissions or bonuses; or (5) which arise out of or are in any way connected with any loss, damage or injury whatsoever resulting from any act committed or omission made prior to the Employee's last day of work as a full-time employee of the Company. 4. Employee acknowledges that, by virtue of Employee's employment at IRIS International, Inc., Employee has been exposed to confidential and proprietary information ("Confidential Information"). Unless compelled to do so by subpoena or other legal process, Employee will not at ANY time after conclusion of employment, in any fashion, form, or manner, either directly or indirectly, divulge, disclose, or communicate to any 5 person, firm, or corporation (other than Employee's legal counsel) in any manner whatsoever any information of any kind, nature, or description concerning any "Confidential Information" relating to the business of Employer, including, without limitation, the names of any of its customers, customer lists, the prices it obtains or has obtained, or at which it sells or has sold its products, the names of its suppliers, methods of obtaining new business, or any other "Confidential Information" concerning the business of Employer, its manner of operation or its plans, processes, or other data of any kind, nature, or description. The parties hereby stipulate that, as between them, the foregoing matters are important, material, and confidential, and gravely affect the effective and successful conduct of the business of Employer, and its good will, and that any breach of the terms of this section is a material breach of this agreement. 5. Employee agrees that Employee will not, for Employee's own account or jointly with another, directly or indirectly, for or on behalf of any individual, partnership, corporation, or other legal entity, as principal, agent or otherwise, solicit or induce any person employed by Employer or any of its subsidiaries or affiliates to leave such employment, whether or not such employment is pursuant to a written contract and whether or not such employment is at-will, or hire any person who has been employed by the Company or any of its subsidiaries or affiliates. 6. The terms of this Agreement are made for the benefit of each person or entity named above. It is the intention of the parties hereto in executing this Agreement that, except for those obligations, promises and covenants expressly set forth herein, it shall be effective as a bar against each and every claim, demand, cause of action, charge or grievance (whether known or unknown, suspected or unsuspected, alleged or unalleged, actual or potential) that either of them may have as of the date hereof. In furtherance of this intention, each of them expressly waives any and all rights and benefits conferred upon him or it by the provisions of Section 1542 of the California Civil Code, which states: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." The parties hereto have had the opportunity to speak with counsel of his or its choice regarding the effect of this waiver. 7. This Agreement shall be given full force and effect according to each and all of its express terms and provisions, including those terms and provisions relating to unknown and 6 unsuspected claims, demands and causes of action, if any, as well as those relating to claims, demands and causes of action earlier specified in this Agreement. 8. This Agreement does not constitute and shall not be construed as an admission by either of the parties hereto, or any of the entities or individuals referred to above, of the truth of any contested matter or of any liability, any wrongful act, or any omission. 9. The parties' discussions pertaining to this Agreement are confidential, and NEITHER PARTY SHALL DISCLOSE THE SUBSTANCES OF THOSE DISCUSSIONS TO ANYONE, except that such discussions may be disclosed to their attorneys and accountants and to governmental taxing authorities, to Employee's spouse, or as may be required to enforce the rights contained in this Agreement in an appropriate legal proceeding. Any third party referenced above must, however, agree equally to be bound by this confidentiality clause. Employee acknowledges that this Agreement will be publicly disclosed as a material contract of the Company, and filed with the Securities and Exchange Commission as an exhibit to the Company's period filings. 10. The parties represent and agree that this Agreement is freely and voluntarily executed. No promise, inducement, or agreement not expressed in this Agreement has been made to Employee or Company. 11. If any term or provision of this Agreement is held to be invalid or unenforceable, the remaining terms or provisions of this Agreement shall continue to be valid and will be performed, construed and enforced to the fullest extent permitted by law. The invalid or unenforceable term or provision shall be deemed amended and limited in accordance with the intent of the parties, as determined from the face of the Agreement, to the extent necessary to permit the maximum enforceability or validation of the term or provision. The terms of this Agreement are to be construed pursuant to California law. 12. In the event of any dispute arising under this Agreement, or as a result of Employee's employment, or any term, condition or the termination thereof, the parties agree to submit to binding arbitration before a mutually agreeable arbitrator with Judicial Arbitration Mediation Services, in Los Angeles, California. 13. The date indicated and Employee's signature above acknowledge Employee's and Employer's review, understanding and full, knowing and voluntary acceptance of the terms and conditions set forth in this Agreement. 7 EX-10 4 ex10-2a.txt EX-10.2 EXHIBIT 10.2 IRIS INTERNATIONAL, INC KEY EMPLOYEE AGREEMENT FOR DONALD MUELLER IRIS INTERNATIONAL, INC., a Delaware corporation (the "COMPANY"), agrees with you as follows: 1. POSITION AND RESPONSIBILITIES. 1.1 The Company will employ you and you shall serve in an executive capacity as CORPORATE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, and perform the duties customarily associated with such capacity from time to time as the Company shall reasonably designate or as shall be reasonably appropriate and necessary in connection with such employment. You will commence service in this capacity on the date set forth in SECTION 2.1 below. 1.2 Subject to SECTION 4 below, you will, to the best of your ability, devote your full time and best efforts to the performance of your duties hereunder and the business and affairs of the Company. You will report to the Company's Chief Executive Officer ("CEO"). You will also have primary responsibility for communicating with the Company's Audit Committee and assisting the committee in discharging its duties. 1.3 You will duly, punctually and faithfully perform and observe any and all rules and regulations which the Company may now or shall hereafter establish governing the conduct of its business, except to the extent that such rules and regulations may be inconsistent with your executive position. 2. TERM OF EMPLOYMENT; TERMINATION. 2.1 The commencement of your employment shall be May 1, 2006 (your "START DATE"). You will commence service as Corporate Vice President and Chief Financial Officer effective upon the resignation of the Company's current Chief Financial Officer, which is anticipated to occur immediately following the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 on or before May 10, 2006. 2.2 Unless otherwise mutually agreed in writing, this Agreement and your employment by the Company pursuant to this Agreement shall be terminated on the earliest of: (a) your death, or any illness, disability or other incapacity that renders you physically unable regularly to perform your duties hereunder for a period in excess of one hundred twenty (120) consecutive days or more than one hundred eighty (180) days in any consecutive twelve (12) month period; (b) thirty (30) days after you, for any reason, give written notice to the Company of your resignation; or (c) immediately if the Company, with or without cause, gives written notice to you of your termination. 2.3 The determination regarding whether you are physically unable regularly to perform your duties (as described in SECTION 2.2(a)) shall be made by the Board of Directors. 2.4 Any notice required pursuant to this SECTION 2 shall be given in accordance with the provisions of SECTION 9 hereof. The exercise of either party's right to terminate this Agreement pursuant to SECTIONS 2.2(b) or (c) are not exclusive and shall not effect either party's right to seek remedies for the other party's breach, if any, giving rise to such termination. 2.5 You may be terminated with our without cause. If you are terminated without cause, you will be entitled to certain severance benefits as described in this Agreement. You shall be deemed terminated "FOR CAUSE" if, in the reasonable determination of the Company, you (a) commit an act that is fraudulent, dishonest or a material breach of the Company's policies, including wrongful disclosure of any trade secrets or other confidential information of the Company, or material breach of SECTION 4 of this Agreement or any material provision of the Employee Confidentiality Agreement (as defined in SECTION 5), (b) are convicted of a felony under federal, state, or local law applicable to the Company or (c) intentionally refuse, without proper cause, to substantially perform duties after a demand for such performance has been delivered in writing by the Company's Chief Executive Officer or the Board of Directors, which notice shall specify the alleged instance of breach, and shall provide you with reasonable time in which to remedy such breach. 3. COMPENSATION; BENEFITS; AND INVESTMENT RIGHTS. 3.1 The Company shall pay to you for the services to be rendered hereunder a base salary at an annual rate of $275,000 subject to increases in accordance with the policies of the Company, as determined by its Board of Directors, in force from time to time, payable in installments in accordance with Company policy. You shall also be entitled to all rights and benefits for which you shall be eligible under bonus, pension, group insurance, long-term disability, life insurance, profit-sharing and other Company benefits which may be in force from time to time and provided specifically to you or for the Company's executive officers generally. 3.2 You will be awarded a 5 year incentive stock option (ISO) to purchase 121,000 shares of the Company's Common Stock. The option shall be issued pursuant to the Company's 1998 Stock Option Plan, have an exercise price equal to the average closing sales price of the Company's Common Stock for the ten trading days preceding your Start Date (the "FMV"), vest over 4 years, 25% on the first anniversary of your Start Date and thereafter in equal quarterly installments, and otherwise be issued on terms consistent with the Company's standard form of incentive stock option agreement. Additionally, you will be awarded a restricted stock grant to purchase 14,500 shares of the Company's Common Stock at a purchase price of $0.01 per share, which restricted shares shall vest over 4 years, 25% on the first anniversary of your Start Date and thereafter in equal quarterly installments, be subject to repurchase by the Company prior to the date they vest at the original price you paid for such shares upon termination of your employment, and otherwise be issued on terms consistent with the Company's standard form of restricted stock agreement. In addition to the foregoing, at the 2 anniversary date of your employment, you will be eligible for further option and/or equity awards, commensurate with other senior executive officers, based on your performance as determined by the CEO and the Compensation Committee of the Board of Directors. 3.3 You shall be eligible to participate in the Company's ESPP Program as in effect from time to time. The ESPP Program currently provides that employees may purchase common stock of the Company at a 15% discount from the market price in an aggregate amount up to 15% of your total cash compensation. 3.4 You shall also be eligible for an annual bonus to be determined by the CEO and Compensation Committee of the Board of Directors in accordance with the Company's bonus program for executive officers. The bonus program provides for cash and stock-based compensation, with the stock-based compensation comprised of incentive stock options and restricted stock awards. 3.5 You shall be entitled to four (4) weeks of paid vacation per year to be taken at such time as will not interfere with the performance of your duties. You will also be entitled to illness days during the term of this Agreement consistent with the Company's standard practice for its employees generally as in effect from time to time. 3.6 In the event you are terminated without cause any time pursuant to SECTION 2.2(c) hereof, the Company shall pay you the equivalent of twelve (12) months base salary following such termination. At the choice of the Company, payment may be in the form of a lump sum payment or through regular payroll payments over the twelve (12) month period. Termination without cause shall include "constructive termination" which means a significant diminution of your fundamental responsibilities as Corporate Vice President and Chief Financial Officer or base compensation, or relocation outside Los Angeles or Ventura counties. 3.7 The Company will pay and/or reimburse you for the following costs associated with your relocation from Hinsdale, Illinois to Los Angeles County or Ventura County, California: (i) moving expenses for you and your family and your possessions, including two automobiles; (ii) use of a furnished corporate apartment in Los Angeles or Ventura County, California for up to twelve months following your Start Date; and (iii) third party costs (including real estate sales commissions) incurred in connection with the sale of your primary residence in Illinois, not to exceed $70,000. All such costs incurred by you shall be documented and submitted to the Company for reimbursement in accordance with the Company's standard expense reimbursement policies. 4. OTHER ACTIVITIES DURING EMPLOYMENT. 4.1 Except with the prior written consent of the Company's Board of Directors, you will not during the term of this Agreement undertake or engage in any other employment, occupation or business enterprise, other than ones in which you are a passive investor in non-competitive businesses. You may engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of your duties hereunder. 4.2 Except as permitted by SECTION 4.3, you will not acquire, assume or participate in, directly or indirectly, any position, investment or interest, known by you to be adverse or antagonistic to, or competitive with, the Company, its businesses or prospects, financial or otherwise. 3 4.3 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, 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 whatsoever which were known by you to directly or indirectly compete with the Company, throughout the world, in any line of business engaged in (or planned to be engaged in) by the Company; PROVIDED, HOWEVER, that anything above to the contrary notwithstanding, you may own, as a passive investor, securities of any competitor corporation, so long as your direct holdings in any one such corporation shall not in the aggregate constitute more than 1% of the publicly-traded voting stock of such corporation. 5. PROPRIETARY INFORMATION AND INVENTIONS. You agree to sign and be bound by the provisions of the Company's standard Employee Confidentiality and Inventions Agreement (the "EMPLOYEE CONFIDENTIALITY AGREEMENT"). 6. REMEDIES. Your duties under the Employee Confidentiality Agreement shall survive termination of your employment with the Company. You acknowledge that a remedy at law for any breach or threatened breach by you of the provisions of the Employee Confidentiality Agreement would be inadequate and you therefore agree that the Company shall be entitled to injunctive relief in case of any such breach or threatened breach. 7. ASSIGNMENT. Neither this Agreement nor any rights or obligations hereunder may be assigned by the Company or by you. 8. SEVERABILITY. In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. If moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear. 9. NOTICES. Any notice which the Company is required or may desire to give you shall be given by personal delivery or registered or certified mail, return receipt requested, addressed to you at the address of record with the Company, or at such other place as you may from time to time designate in writing. Any notice which you are required or may desire to give to the Company hereunder shall be given by personal delivery or by registered or certified mail, return receipt requested, addressed to the Company's Chief Executive Officer, at the Company's principal office or at such other office as the Company may from time to time designate in writing. The date of personal delivery or the date of mailing any such notice shall be deemed to be the date of delivery thereof. 4 10. WAIVER. If either party should waive any breach of any provisions of this Agreement, he or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement. 11. COMPLETE AGREEMENT; AMENDMENTS. The foregoing, together with the Employee Confidentiality Agreement, 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. 12. HEADINGS. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof. 13. CHOICE OF LAW. All questions concerning the construction, validity and interpretation of this Agreement will be governed by the laws of the State of California, without giving effect to any choice of law principles. [SIGNATURES ON FOLLOWING PAGE] 5 IN WITNESS WHEREOF, the parties have executed this Key Employee Agreement on the day and year written below. IRIS INTERNATIONAL, INC. By: /s/ Cesar M. Garcia ------------------------------------- Name: Cesar M. Garcia Its: Chief Executive Officer Dated: May 1, 2006 ACCEPTED AND AGREED TO THIS 1ST DAY OF MAY 2006 /s/ Donald Mueller - ------------------------------------ Donald Mueller -----END PRIVACY-ENHANCED MESSAGE-----