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October 10, 2003   EXHIBIT 10.48

 

Robin C. Stracey

 

By FedEx

 

Dear Robin:

 

On behalf of the Board of Directors of Applied Imaging Corp., I am pleased to
extend an offer to you to join us as President and Chief Operating Officer based
in our Santa Clara, California headquarters. You will be responsible for all
commercial activities of the Company, including the worldwide sales and
marketing of our products, all business development and corporate partnership
activities, product development, manufacturing, customer support and field
service operations. As a key member of the senior management team and an officer
of the Company, you will be reporting to Carl Hull, Chief Executive Officer.
Reporting to you will be Paddy O’Kelly, Vice President, Operations, with product
development and manufacturing responsibilities; Colin Christie, Director of
International Sales; Jeff Heimburger, Director of Marketing and Customer
Support; and, Brian MacDonald, Director of US Sales.

 

Your will be paid at the rate of $19,417 per month, starting on November 17,
2003. In addition to your base salary, you will participate in an incentive
compensation program with the following components:

 

  •   A quarterly sales incentive based on your commercial team’s achievement of
specific revenue, product mix and product development goals each calendar
quarter; and,

 

  •   An annual management incentive that is based on the Company’s achievement
of specific corporate goals as approved by the Company’s Board of Directors.

 

Your target annual incentive amount will be $80,000 at planned levels of goal
achievement. Your participation in the incentive plan will be structured so that
you may earn up to $150,000 annually in addition to your base salary for maximal
goal achievement and superior corporate performance. We anticipate that
approximately 75% of your annual incentive amounts will be based, and paid, upon
the achievement of quarterly milestones. To assist you with the transition from
your current senior executive position with another corporation, Applied Imaging
will guarantee the prorated target incentive amounts for the first two calendar
quarters of your employment with the Company.

 

You will also be recommended to the Board of Directors for the issuance of a
nonstatutory stock option (NSO) at an initial level of 200,000 shares. The
exercise price of your option will be the closing market price of the company’s
common stock on the last trading day preceding your start date with the Company.
You will vest 25% of your total option on the one-year anniversary of your
employment start date and monthly (1/48th) thereafter. It will, therefore,

 

 

2380 Walsh Avenue, Bldg. B, Santa Clara, CA 95051 Telephone 408-562-0250, Fax
408-562-0264 www.aicorp.com

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take you four years to become fully vested in this initial option grant. In the
event of a change of control of the Company, this entire grant will be subject
to immediate, accelerated vesting.

 

In the event that the Company terminates your employment for any reason not
involving cause, you will receive a severance benefit equal to six months base
salary, paid in accordance with the Company’s normal payroll practices. [*]
Either offer of a severance benefit is conditioned upon your execution of a
release that will include confidentiality and non-compete provisions acceptable
to the Company. For the purpose of clarification, you may receive the severance
benefits outlined above for either stated reason, but will not be eligible to
receive both benefits under any circumstance.

 

As an Applied Imaging employee, you are eligible to receive certain employee
benefits, which presently include 15 days per year of vacation time and up to 10
days per year of sick leave. Applied Imaging will provide medical, dental and
life insurance benefits to you at a subsidized rate. Medical and dental
insurance is also available for you and your qualifying dependents. Coverage
under these various programs will begin 30 days after your date of hire. Applied
Imaging also offers a 401(k) plan with an employer match of the first 3% of
employee contributions, subject to any statutory limitations on contributions
made on behalf of highly-compensated employees. We also currently offer a
discounted employee stock purchase program.

 

Prior to beginning employment with the Company, the completion of a drug
screening test is required. Please contact Dale Xavier at 408-450-4330 to
arrange for this screen upon your acceptance of this offer. This offer of
employment is contingent upon your successful completion of this screening test
as required by the Company’s policies and procedures. In addition, you will be
required to sign the Company’s standard Employment, Confidential Information and
Invention Assignment Agreement which I have attached for your reference.
Additionally, as a final step in this process, Neil Kazan is providing us with
the written results of his reference checks; we expect to have all of those in
our hands by this weekend.

 

You should be aware that your employment with Applied Imaging is for no
specified period. As a result, you are free to resign at any time, for any
reason or for no reason. Similarly, the Company is free to conclude its
employment relationship with you at any time, with or without cause.

 

*   Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment.

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If you have the time over the weekend, Nanci and I would like to invite you to
join us at the house for a welcoming glass of wine, or other libation that you
may prefer. Please give me a call at home if you might be able to join us on
Sunday sometime. Kirk Raab, Jack Blakemore, Jack Goldstein and I are each
looking forward to welcoming you to the Applied Imaging team. Please indicate
your acceptance of the terms of this offer by signing one copy and returning it
to our confidential fax.

 

With best personal regards,

 

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Carl W. Hull

Chief Executive Officer

 

Accepted:     /s/ Robin C. Stracey    

Robin C. Stracey