Exhibit 10.20

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

PARTIES:

  

FLIR Systems, Inc.            (“Company”)

    

16505 S.W. 72nd Avenue

    

Portland, Oregon 97224

    

Earl Lewis                                 (“Executive”)

    

58 Ford Road

    

Sudbury, Massachusetts 01776

 

EFFECTIVE DATE: January 1, 2004

 

RECITALS:

 

Company wishes to obtain the services of Executive for the duration of this
Agreement, and the Executive wishes to provide his services for such period, all
upon the terms and conditions set forth in this Agreement.

 

Therefore, in consideration of the mutual promises contained herein, the parties
agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1 “Base Salary”    means regular cash compensation paid on a periodic basis
exclusive of benefits, bonuses or incentive payments.

 

1.2 “Board”    means the Board of Directors of Company.

 

1.3 “Cause”    means Executive committed any one or more of the following: (i)
the repeated failure to perform any material duties under this Agreement or
negligence of Executive in the performance of such duties, and if such failure
or negligence is susceptible of cure, the failure to effect such cure within 30
days after written notice of such failure or negligence is given to Executive;
(ii) use of alcohol or illegal drugs which interferes with the performance of
Executive’s duties hereunder; (iii) theft, embezzlement, fraud, misappropriation
of funds, other acts of dishonesty or the violation of any law, ethical rule or
fiduciary duty relating to Executive’s employment by Company; (iv) a felony or
any act involving moral turpitude; (v) the violation of any confidentiality or
proprietary rights agreement between Executive and Company, or (vi) the
violation of Company policy or procedure, or the breach of any material
provision of this Agreement, and if such violation or breach is susceptible of
cure, the failure to effect such cure within 30 days after written notice of
such breach is given to Executive.

 

1.4 “Disability”    means the inability of Executive to perform his duties under
this Agreement, with or without reasonable accommodation, because of physical or
mental incapacity for a continuous period of five (5) months, as determined by
the Board.

 

1.5 “FLIR”    shall mean FLIR Systems, Inc., and its wholly owned subsidiaries.

 

ARTICLE II

EMPLOYMENT, DUTIES AND TERM

 

2.1 Employment.    Upon the terms and conditions set forth in this Agreement,
Company hereby employs Executive as President and Chief Executive Officer, and
Executive accepts such employment. Except as expressly provided herein,
termination of this Agreement by either party shall also terminate Executive’s
employment by Company.

 

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2.2    Duties.    Executive shall devote his full-time and best efforts to
Company and to fulfilling the duties of President and Chief Executive Officer,
which shall include such duties as may from time to time be assigned him by the
Board, provided that such duties are reasonably consistent with Executive’s
education, experience and background. Executive shall comply with Company’s
policies and procedures to the extent they are not inconsistent with this
Agreement in which case the provisions of this Agreement prevail. Executive
shall also be permitted to serve on outside boards, commissions and partnerships
to the extent such service does not conflict with the provisions of this
Agreement.

 

2.3    Term.    The term of this Agreement shall be until January 1, 2006,
unless earlier terminated in accordance with Article IV. This Agreement may be
extended by mutual agreement of the parties.

 

ARTICLE III

COMPENSATION AND EXPENSES

 

3.1    Base Salary.    For all services rendered under this Agreement during the
term of Executive’s employment, Company shall pay Executive an annual Base
Salary of $500,000 for 2004 and $550,000 for 2005.

 

3.2    Bonus.    Executive shall be eligible for an annual Bonus based on the
following formula:

 

A bonus of up to one hundred percent (100%) of Executive’s Base Salary shall be
deemed earned in the event the Company achieves $1.55 in earnings per share at
the end of 2004, excluding one-time charges relating to the acquisition of
Indigo Systems Corporation or relating to any other non-operating events as
determined by the Board (the “Base EPS”). The Compensation Committee of the
Board shall establish the Base EPS for 2005 upon completion of the audit for
2004. Such bonus shall be increased or decreased by ten percent (10%) of
Executive’s Base Salary for every incremental increase or decrease of $0.05 in
the Base EPS at the end of the applicable year. For example, in 2004 should the
Company achieve $1.25 in earnings per share for the year, Executive shall be
deemed to have earned a bonus of forty percent (40%) of Executive’s Base Salary,
and should the Company achieve $1.75 in earnings per share for the year,
Executive shall be deemed to have earned one hundred forty percent (140%) of
Executive’s Base Salary.

 

3.3    Stock Options.    Executive shall annually be eligible for grants of
options to purchase shares of FLIR stock, based upon achievement of objectives
and for such quantity of options as determined by the Board.

 

3.4    Vacation.    Executive shall have four weeks of paid vacation annually.

 

3.5    Benefits.    Executive shall be eligible to participate in all
Company-sponsored health and welfare benefit plans made available to other
executives of the Company until age 65.

 

3.6    Supplemental Employee Retirement Plan.    Company shall make all
contributions to its Supplemental Employee Retirement Plan on behalf of
Executive for each Plan year based on Executive’s total compensation for that
year. For purposes of calculating the amount of such annual contribution,
Executive’s annual compensation shall include all bonuses earned for that year.

 

3.7    Housing and Relocation.    Company shall pay for reasonable housing for
Executive’s use while in Portland. In the event Executive elects to relocate
from Boston to Portland, Company shall pay Executive’s moving expenses.

 

3.8    Automobile.    Company shall pay for an automobile for Executive’s use
while in Portland.

 

3.9    Travel Expenses.    Company shall pay for reasonable travel expenses for
Executive and his wife between Boston and Portland.

 

3.10    Business Expenses.    Company shall, in accordance with, and to the
extent of, its policies in effect from time to time, bear all ordinary and
necessary business expenses reasonably incurred by Executive in performing his
duties as an employee of Company, provided that Executive accounts promptly for
such expenses to Company in the manner prescribed from time to time by Company.

 

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3.11    Taxes and Withholding.    All amounts payable to Executive under this
Agreement shall be net of amounts required to be withheld by law. To the extent
there is any tax consequence to Executive in connection with the provision of
housing or payment for work between two states, Executive’s Base Salary shall be
grossed up to cover the tax consequence to Executive.

 

ARTICLE IV

EARLY TERMINATION

 

4.1    Early Termination.    This Article sets forth the terms for early
termination of this Agreement.

 

4.2    Termination for Cause.    Company may terminate this Agreement for Cause
immediately upon written notice to Executive. In the event of termination for
Cause pursuant to this Section 4.2, Executive shall be paid at the then current
rate of Executive’s Base Salary through the date of termination.

 

4.3     Termination Without Cause.    Either Executive or Company may terminate
this Agreement and Executive’s employment without Cause on no less than 30 days’
written notice. In the event Executive terminates this Agreement without Cause
pursuant to this Section 4.3, Executive shall be paid his base salary through
the date of termination. In the event Company terminates Executive without Cause
pursuant to this Section 4.3, Company shall pay to Executive either an amount
equal to Executive Base Salary in effect at the time of termination for a period
of eighteen months, or for the duration of the remaining term of the Agreement,
whichever is greater. Further, in the event Company terminates Executive without
Cause pursuant to this Section 4.3, all options granted to Executive shall
immediately vest and Executive shall have a period of one year within which to
exercise those options. Executive shall also be entitled to a prorated portion
of the annual bonus to be paid for that year as determined by the Board.

 

4.4     Termination in the Event of Death or Disability.    This Agreement shall
terminate in the event of death or disability of Executive.

 

(a)    In the event of Executive’s death, Company shall pay all accrued wages
owing through the date of termination, plus an amount equal to one years’ Base
Salary. Such amount shall be paid (1) to the beneficiary or beneficiaries
designated in writing to Company by Executive, (2) in the absence of such
designation, to the surviving spouse, or (3) if there is no surviving spouse, or
such surviving spouse disclaims all or any part, then the full amount, or such
disclaimed portion, shall be paid to the executor, administrator or other
personal representative of Executive’s estate. The amount shall be paid as a
lump sum as soon as practicable following Company’s receipt of notice of
Executive’s death.

 

(b)    In the event of Disability, Base Salary shall be paid through the final
day of the fifth month referenced in the definition of “Disability.”

 

4.5    Entire Termination Payment.    The compensation provided for in this
Article IV shall constitute Executive’s sole remedy for termination pursuant to
this Article. Executive shall not be entitled to any other termination or
severance payment which may be payable to Executive under any other agreement
between Executive and Company or under any policy in effect at, preceding or
following the date of termination.

 

4.6    Moving Expenses.    Upon termination of this Agreement pursuant to either
Sections 4.2, 4.3 or 4.4, Company shall pay all of Executive’s moving expenses
from Portland to Boston, or to any other location within the U.S. designated by
Executive.

 

ARTICLE V

CONFLICT OF INTEREST

 

5.1    During the term of employment with Company, Executive will engage in no
activity or employment which may conflict with the interest of Company, and will
comply with Company’s policies and guidelines pertaining to business conduct and
ethics.

 

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ARTICLE VI

GENERAL PROVISIONS

 

6.1    Successors and Assigns.    Except as otherwise provided in Article VI,
This Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns, administrators, executors, legatees,
and heirs. In that this Agreement is a personal services contract, it shall not
be assigned by Executive.

 

6.2    Notices.    All notices, requests and demands given to or made pursuant
hereto shall, except as otherwise specified herein, be in writing and be
delivered or mailed to any such party at its address as set forth at the
beginning of this Agreement. Either party may change its address, by notice to
the other party given in the manner set forth in this Section. Any notice, if
mailed properly addressed, postage prepaid, registered or certified mail, shall
be deemed dispatched on the registered date or that stamped on the certified
mail receipt, and shall be deemed received within the third business day
thereafter or when it is actually received, whichever is sooner.

 

6.3    Caption.    The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.

 

6.4    Governing Law and Jurisdiction.    The validity, construction and
performance of this Agreement shall be governed by the laws of the State of
Oregon, which shall be the exclusive jurisdiction for any action to interpret or
enforce this Agreement.

 

6.5    Mediation.    In the case of any dispute arising under this Agreement
which cannot be settled by reasonable discussion, the parties agree that, prior
to commencing any proceeding, they will first engage the services of a
professional mediator agreed upon by the parties and attempt in good faith to
resolve the dispute through confidential nonbinding mediation. Each party shall
bear one-half (½) of the mediator’s fees and expenses and shall pay all of its
own attorneys’ fees and expenses related to the mediation. This Section 6.5
shall not apply to any action to enforce Executive’s obligations under a
confidentiality or proprietary rights agreement.

 

6.6    Attorney Fees.    In the event of any suit, action or arbitration to
interpret or enforce this Agreement, the prevailing party shall be entitled to
recover its attorney fees, costs and out-of-pocket expenses at trial and on
appeal.

 

6.7    Construction.    Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

 

6.8    Waivers.    No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy granted hereby or by any related document or by law.

 

6.9    Modification.    This Agreement may not be and shall not be modified or
amended except by written instrument signed by the parties hereto.

 

6.10    Entire Agreement.    This Agreement constitutes the entire agreement
between the parties and supersedes all prior or contemporaneous oral or written
understandings, statements, representations or promises with respect to its
subject matter. This Agreement was the subject of negotiation between the
parties and, therefore, the parties agree that the rule of construction
requiring that the agreement be construed against the drafter shall not apply to
the interpretation of this agreement.

 

EARL R. LEWIS

  

FLIR SYSTEMS, INC.

/s/    EARL R. LEWIS        

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By:

  

/s/    JOHN C. HART        

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Title:

  

Chairman of the

Compensation Committee

 

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