EXHIBIT 10.21

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into this 1st day of
June, 2003, by and between OSI SYSTEMS, INC. (“Company”), a California
corporation, and VICTOR SZE (“Employee”), with reference to the following facts:

 

A. Employee has been serving Company as General Counsel and Vice President,
Corporate Affairs in a satisfactory and capable manner pursuant to an oral or
written agreement between Employee and Company.

 

B. Company has requested that Employee enter into a written employment agreement
with Company with respect to matters relating to continued employment with
Company, and Employee has agreed to do so, upon the terms and conditions set
forth herein.

 

NOW, THEREFORE, in consideration of the terms and conditions and the mutual
agreements and covenants set forth herein, the parties hereto agree as follows:

 

1. SCOPE OF EMPLOYMENT.

 

1.1 Capacity. Company hereby continues to employ Employee and Employee hereby
accepts continued employment as an executive of Company. Employee shall report
to the Chief Executive Officer of Company and perform the services and duties
customarily incident to such position and as otherwise decided upon by the Board
of Directors.

 

1.2 Devotion of Services. Employee shall devote his entire productive time,
ability and attention exclusively to the business of Company during the term of
this Agreement, except for passive investments, charitable and non-profit
enterprises and any other business investments which do not interfere with his
duties hereunder and which are not competitive with Employer’s activities
(except as the owner of less than 2% of the issued and outstanding capital stock
of a publicly traded corporation). Employee shall perform and discharge well and
faithfully those duties assigned him by Company. Employee shall perform his
services under this Agreement in Los Angeles County, California, or such other
location as is acceptable to Employee.

 

2. TERM. Subject to Section 6 herein, the term of this Agreement shall commence
as of the date of this Agreement and shall continue and remain in full force and
effect for a period of one (1) year. However, in the event that Company
thereafter continues to employ Employee, this Agreement shall be deemed
automatically renewed upon the same terms and conditions set forth herein except
(a) that the parties may mutually agree to revise any of the terms set forth
herein, and (b) the employment relationship will be on an “at will” basis, which
means that, subject to Section 6.4 herein, either Company or Employee may elect
to terminate the employment relationship at any time for any reason whatsoever,
with or without cause. Employee acknowledges that no representation has been
made by Company as to any minimum or specified term or length of employment
following the term set forth above.

 

3. COMPENSATION.

 

3.1 Salary and Bonus. In consideration of the services to be rendered by
Employee hereunder, including without limitation any services rendered as an
officer or director of Company or any subsidiary or affiliate thereof, during
the term of this Agreement Company shall pay to Employee the following:

 

(a) A salary in the amount of $155,000 per annum, which salary shall be reviewed
no less frequently than annually by the Company’s Board of Directors. The Board
of Directors may, in its role and absolute discretion, increase Employee’s
salary but, in no event, may Employee’s salary be reduced during the term of
this Agreement.

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(b) The Company may, but shall not be obligated to, establish a fiscal year-end
bonus pool for members of management of Company and/or its subsidiaries. At the
sole discretion of Company, Employee may be entitled to participate therein.

 

(c) All payments to Employee shall be subject to the regular withholding
requirements of all appropriate governmental taxing authorities.

 

(d) If the Company’s Board of Directors and/or any committee thereof grants
options to senior members of management of the Company and/or its subsidiaries,
the Board of Directors and/or such committee shall consider granting options to
Employee.

 

3.2 Other Benefits. Employee shall be entitled to participate in any medical and
insurance plan which Company is presently providing or may provide to its senior
executives. Employee acknowledges that the terms of such plans may change from
time to time.

 

3.3 Expenses. Company will advance to or reimburse Employee for all reasonable
travel and entertainment required by Company and other reasonable expenses
incurred by Employee in connection with the performance of his services under
this Agreement in accordance with Company policy as established from time to
time.

 

4. INVENTIONS.

 

4.1 Right to Inventions. Employee agrees that any discoveries, inventions or
improvements of whatever nature (collectively “Inventions”) made or conceived by
Employee, solely or jointly with others, during the term of his employment with
Company, that are made with Company’s equipment, supplies, facilities, trade
secrets or time; or that relate, at the time of conception of or reduction to
practice, to the business of Company or Company’s actual or demonstrably
anticipated research or development; or that result from any work performed by
Employee for Company, shall belong to Company. Employee also agrees that Company
shall have the right to keep any such Inventions as trade secrets, if Company so
chooses. In order to permit Company to claim rights to which it may be entitled,
Employee agrees to disclose to Company in confidence all Inventions that
Employee makes during the course of his employment and all patent applications
filed by Employee within three (3) years after termination of his employment.
Employee shall (a) assist Company in obtaining patents on all Inventions deemed
patentable by Company in the United States and in all foreign countries and (b)
execute all documents and do all things necessary to obtain letters patent to
vest Company with full and extensive titles thereto and to protect the same
against infringement by others. For the purposes of this Agreement, an Invention
is deemed to have been made during the period of Employee’s employment if the
Invention was conceived or first actually reduced to practice during that
period, and Employee agrees that any patent application filed within three (3)
years after termination of his employment with the Company shall be presumed to
relate to an Invention made during the term of Employee’s employment unless
Employee can provide evidence to the contrary.

 

4.2 Assignment of Inventions and Patents. In furtherance of, and not in
contravention, limitation and/or in place of, the provisions of Section 4.1
above, Company hereby notifies Employee of California Labor Code Section 2870,
which provides:

 

“Any provision in an employment agreement which provides that an employee shall
assign or offer to assign any of his or her rights in an invention to his or her
employer shall not apply to an invention for which no equipment, supplies,
facility, or trade secret information of the employer was used and which was
developed entirely on the employee’s own time, and (a) which does not relate (1)
directly or indirectly to the business of the employer or (2) to the employer’s
actual or demonstrably anticipated research or development, or (b) which does
not result from any work performed by the employee for the employer. Any
provision which purports to apply to such an invention is to that extent against
the public policy of this state and is to that extent void and unenforceable.”

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Employee acknowledges that he has been notified by the Company of this law, and
understands that this Agreement does not apply to Inventions which are otherwise
fully protected under the provisions of said Labor Code Section 2870. Therefore,
Employee agrees to promptly disclose in writing to the Company all Inventions,
whether Employee personally considers them patentable or not, which Employee
alone, or with others, conceives or makes during his employment with Company or
as is otherwise required and set forth under Section 4.1 above. Company shall
hold said information in strict confidence to determine the applicability of
California Labor Code Section 2870 to said Invention and, to the extent said
Section 2870 does not apply, Employee hereby assigns and agrees to assign all
his right, title and interest in and to those Inventions which relate to
business of the Company and Employee agrees not to disclose any of these
Inventions to others without the prior written express consent of Company.
Employee agrees to notify Company in writing prior to making any disclosure or
performing any work during the term of his employment with Company which may
conflict with any proprietary rights or technical know-how claimed by Employee
as his property. In the event Employee fails to give Company notice of such
conflict, Employee agrees that Employee shall have no further right or claim
with respect to any such conflicting proprietary rights or technical know-how.

 

5 CONFIDENTIALITY.

 

5.3 Restrictions on Use of Trade Secrets and Records. During the term of his
employment, Employee will have access to and become acquainted with various
trade secrets of Company, consisting of formulas, patterns, devices, secret
Inventions, processes, compilations of information, records and specifications
(collectively “Trade Secrets”), all of which are owned by Company and used in
the operation of Company’s business. Additionally, Employee will have access to
and may become acquainted with various files, records, customer lists,
documents, drawings, specifications, equipment and similar items relating to the
business of Company (collectively “Confidential Information”). All such Trade
Secrets and Confidential Information, whether they are designed, conceived or
prepared by Employee or come into Employee’s possession or knowledge in any
other way, are and shall remain the exclusive property of Company and shall not
be removed from the premises of Company under any circumstances whatsoever
without the prior written consent of Company. Employee promises and agrees that
he will not use for himself or for others, or divulge or disclose to any other
person or entity, directly or indirectly, either during the term of his
employment by Company or at any time thereafter, for his own benefit or for the
benefit of any other person or entity or for any reason whatsoever, any of the
Trade Secrets or Confidential Information described herein, which he may
conceive, develop, obtain or learn about during or as a result of his employment
by Company unless specifically authorized to do so in writing by Company.

 

5.4 Non-Interference. Employee recognizes that Company has invested substantial
effort in assembling its present employees and in developing its customer base.
As a result, and particularly because of Company’s many types of confidential
business information, Employee understands that any solicitation of a customer
or employee of Company, in an effort to get them to change business
affiliations, would presumably involve a misuse of Company’s confidences, Trade
Secrets and Confidential Information. Employee therefore agrees that, for a
period of one (1) year from the later of the date of termination of Employee’s
employment with Company for any reason whatsoever or the receipt by Employee of
any compensation paid to Employee by Company, Employee will not influence, or
attempt to influence, existing employees or customers of Company in an attempt
to divert, either directly or indirectly, their services or business from
Company.

 

6 TERMINATION OF AGREEMENT.

 

6.5 Termination by Company. Company may terminate Employee’s employment
hereunder at any time for cause without payment of severance or similar
benefits. For purposes of this Section 6.1, “cause” shall mean the following
events: (a) any willful breach of duty by Employee in the course of his
employment, (b) the breach of any provision of this Agreement or any
misrepresentation by Employee hereunder, (c) misconduct, neglect or negligence
in the performance of Employee’s duties and obligations, (d) disloyal,
dishonest, willful misconduct, illegal, immoral or unethical conduct by
Employee, (e) such carelessness or inefficiency in the performance of his duties
that Employee is unfit to continue in the service of Company, (f) failure of
Employee to comply with the policies or directives of Company and/or failure to
take direction from Company’s Board of Directors, or (g) such other conduct
which is substantially detrimental to the best interests of Company. Any such
termination shall become effective upon delivery of written notice to Employee.

 

6.6 Termination by Employee. Employee may terminate his employment hereunder at
any time for cause. For purposes of this Section 6.2, “cause” shall mean the
breach of any provision of this Agreement by Company which is not cured within
thirty (30) days after Employee delivers written notice to the Company’s Board
of Directors describing such breach. If the breach is not so cured within such
thirty (30) days after delivery of such notice, the termination of employment
shall become effective after the expiration of such cure period.

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6.7 Death or Disability. Employee’s employment with Company shall cease upon the
date of his death. In the event Employee becomes physically or mentally disabled
so as to become unable for more than one hundred eighty (180) days in the
aggregate in any twelve (12) month period to perform his duties on a full-time
basis with reasonable accommodations, Company may, at its sole discretion,
terminate this Agreement and Employee’s employment.

 

6.8 Termination Following Automatic Renewal. In the event that this Agreement is
automatically renewed pursuant to Paragraph 2 herein, either Company or Employee
may terminate Employee’s employment hereunder at any time and for any reason
whatsoever, with or without cause, upon thirty (30) days prior written notice
delivered to the other party.

 

6.9 Effect of Termination. Upon the termination of Employee’s employment
hereunder or the expiration or termination of the Agreement, (a) Company shall
pay Employee all compensation accrued and outstanding as of the date of such
termination or expiration, and (b) notwithstanding anything to the contrary
contained herein, the rights and obligations of each party under Paragraphs 4, 5
and 8 herein shall survive such termination or expiration. Notwithstanding
anything to the contrary contained in this Agreement if, prior to the end of the
initial one (1) year term, Employer terminates this Agreement without cause,
Employee shall continue to be entitled to receive all of the compensation and
other benefits provided for in Paragraph 3 for the remainder of said one (1)
year term without any deduction or offset for any compensation earned or
received by Employee from any other sources.

 

7 EMPLOYEE’S REPRESENTATIONS. As an inducement for Company to execute this
Agreement, Employee represents and warrants to Company that the negotiation,
execution and delivery of this Agreement by Employee together with the
performance of his obligations hereunder does not breach or give rise to a
breach under any employment, confidentiality, non-disclosure, non-competition or
any other agreement, written or oral, to which Employee is a party.

 

8 EQUITABLE REMEDIES.

 

8.10 Injunctive Relief. Employee acknowledges and agrees that the covenants set
forth in Paragraphs 4 and 5 herein are reasonable and necessary for protection
of Company’s business interests, that irreparable injury will result to Company
if Employee breaches any of the terms of said covenants and that, in the event
of Employee’s actual or threatened breach of said covenants, Company will have
no adequate remedy at law. Employee accordingly agrees that in the event of
actual or threatened breach of any of such covenants, Company shall be entitled
to immediate injunctive and other equitable relief, without bond and without the
necessity of showing actual monetary damages. Nothing contained herein shall be
construed as prohibiting Company from pursuing any other remedies available to
it for such breach or threatened breach, including the recovering of any damages
which it is able to prove. Each of the covenants in Paragraphs 4 and 5 shall be
construed as independent of any other covenants or provisions of this Agreement.
In the event of any judicial determination that any of the covenants set forth
in Paragraphs 4 and 5 herein or any other provisions of the Agreement are not
fully enforceable, it is the intention and desire of the parties that the court
treat said covenants as having been modified to the extent deemed necessary by
the court to render them reasonable and enforceable and that the court enforce
them to such extent.

 

8.11 Specific Enforcement. Employee agrees and acknowledges that he is obligated
under this Agreement to render services of a special, unique, unusual,
extraordinary and intellectual character, thereby giving this Agreement peculiar
value, so that the loss thereof could not be reasonable or adequately
compensated in damages in an action at law. Therefore, in addition to other
remedies provided by law, Company shall have the right, during the term of this
Agreement, to obtain specific performance hereof by Employee and to obtain
injunctive relief against the performance of service elsewhere by Employee
during the term of this Agreement.

 

9 GENERAL.

 

9.12 Entire Agreement. This Agreement contains the entire understanding between
the parties hereto and supersedes all other oral and written agreements or
understandings between them.

 

9.13 Amendment. This Agreement may not be modified, amended, altered or
supplemented except by written agreement between Employee and Company.

 

9.14 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

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9.15 Jurisdiction. Each party hereby consents to the exclusive jurisdiction of
the state and federal courts sitting in Los Angeles County, California, in any
action on a claim arising out of, under or in connection with this Agreement or
the transactions contemplated by this Agreement. Each party further agrees that
personal jurisdiction over him may be effected by service of process by
registered or certified mail addressed as provided in Section 9.9 herein, and
that when so made shall be as if served upon him personally within the State of
California.

 

9.16 Expenses. In the event an action at law or in equity is required to enforce
or interpret the terms and conditions of this Agreement, the prevailing party
shall be entitled to reasonable attorney’s fees and costs in addition to any
other relief to which that party may be entitled.

 

9.17 Interpretation. The headings herein are inserted only as a matter of
convenience and reference, and in no way define, limit or describe the scope of
this Agreement or the intent of any provisions thereof. No provision of this
document is to be interpreted for or against any party because that party or
party’s legal representative drafted it.

 

9.18 Successors and Assigns. This Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their heirs, successors, assigns and
personal representatives. As used herein, the successors of Company shall
include, but not be limited to, any successor by way of merger, consolidation,
sale of all or substantially all of its assets or similar reorganization. In no
event may Employee assign any rights or duties under this Agreement.

 

9.19 Controlling Law; Severability. The validity and construction of this
Agreement or of any of its provisions shall be determined under the laws of the
State of California. Should any provision of this Agreement be invalid either
due to the duration thereof or the scope of the prohibited activity, such
provision shall be limited by the court to the extent necessary to make it
enforceable and, if invalid for any other reason, such invalidity or
unenforceability shall not affect or limit the validity and enforceability of
the other provisions hereof.

 

9.20 Notices. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if personally received by the party to
whom it is sent or delivered, or if sent by registered or certified mail,
postage prepaid, to Employee’s residence in the case of notice to Employee, or
to its principal office if to Company. A notice is deemed received or delivered
on the earlier of the day received or three (3) days after being sent by
registered or certified mail in the manner described in this Section.

 

9.21 Waiver of Breach. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

OSI SYSTEMS, INC.

By:

 

 

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Deepak Chopra

Chief Executive Officer

By:

 

 

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Victor Sze