**Exhibit 10.69**

 

**EMPLOYMENT AGREEMENT**

 

THIS EMPLOYMENT AGREEMENT (the “***Agreement***”) is made and entered into as of October 12, 2004 by and between Molecular ImagingCorporation, a Delaware corporation (the “***Company***”) and Kenneth C. Frederick (the “***Employee***”). 

 

 

**BACKGROUND**

 

A.    The Company desires to retain the services of theEmployee and the Employee desires to provide services, as Chief Executive Officer of the Company from the date of this Agreement (the “***Effective Date***”). 

 

B.    The Employee is willing to be employed by the Company on the terms and subject to the conditionsset forth in this Agreement. 

 

THE PARTIES AGREE AS FOLLOWS:

 

1.    ***Positions and Duties***.

 

1.1    ***Title***.    The Employee shall be employed by the Company as its Chief Executive Officer and the Company agrees to employ and retain the Employee in such capacity. The Employeeshall report to, and serve at the pleasure of, the Company Board of Directors (the “***Board***”). 

 

1.2    ***Duties***.    The Employee shall devote substantially all of his business time, energy, andskill to the affairs of the Company; provided, however, that reasonable time for personal business, charitable or professional activities shall be permitted, so long as such activities do not materially interfere with the Employee’s performanceof services under this Agreement. The Employee’s services shall be primarily performed at San Diego, California, unless otherwise agreed by the Company. 

 

1.3    ***Term of Employment***.    The term of Employee’s employment pursuant to this Agreementshall commence on the Effective Date, and shall expire on November 15, 2005, unless renewed or extended by the agreement of the parties hereto; provided, however, the Board (with the Employee abstaining from any such vote of the Board at such time)may terminate the Agreement for any reason on or after May 15, 2004 by providing written notice to the Employee. 

 

1.4    ***Employee Indemnification***.    The Employee shall be entitled to all rights to indemnificationas a Company director and officer as provided under the laws of the State of Delaware, the Company’s Certificate of Incorporation, as amended, the Company’s Bylaws, and the Company’s insurance policies. 

 

2.    ***Terms of Employment***. 

 

2.1    ***Definitions***.    For purposes of this Agreement, the following terms shall have the following meanings: 

(a)    “***Accrued Compensation***” shall mean any accrued TotalCash Compensation, any benefits under any plan of the Company in which the Employee is a participant to the full extent of Employee’s rights under such plans, any accrued vacation pay, and any appropriate business expenses incurred by theEmployee in connection with the performance of Employee’s duties hereunder, all to the extent unpaid on the date of termination. 

 

(b)    “***Base Salary***” shall have the meaning set forth in Section 3.1 hereof. 

 

(c)    “***Death Termination***” shallmean termination of the Employee’s employment because of the death of the Employee. 

 

(d)    “***Disability Termination***” means termination by the Company of the Employee’s employment by reason of the Employee’s incapacitation due to disability. TheEmployee shall be deemed to be incapacitated due to disability if at the end of any month the Employee is unable to perform substantially all of his or her duties under this Agreement in the normal and regular manner due to illness, injury or mentalor physical incapacity, and has been unable so to perform for either (i) three consecutive full calendar months then ending, or (ii) 90 or more of the normal working days during the 12 consecutive full calendar months then ending. Nothing in thisparagraph shall alter the Company’s obligations under applicable law, which may, in certain circumstances, result in the suspension or alteration of the foregoing time periods. 

 

(e)    “***Termination For Cause***” means termination by the Company of theEmployee’s employment by reason of the Employee’s (i) dishonesty or fraud, (ii) gross negligence in the performance of his or her duties hereunder, (iii) material breach of this Agreement, (iv) intentional engagement in acts seriouslydetrimental to the Company’s operations, (v) conviction of a felony involving moral turpitude, or (vi) failure to comply with any lawful orders or directions of the Board that are not incompatible with his position with the Company ormanifestly unreasonable or unethical, provided that the Board delivers to Employee a written notification specifying in sufficient detail such order or direction and the Employee has thirty (30) days within which to comply with such order ordirection (or such reasonably shorter period of time if such ordered or directed task by its nature requires completion in less than thirty (30) days)). 

 

(f)    “***Termination Other Than For Cause***” means termination by the Company of the Employee’s employmentfor any reason other than as specified in Sections 2.1(c), (d), (e) or (h) hereof. 

 

(g)    “***Total Cash Compensation***” shall mean the Employee’s Base Salary (as defined in Section 3.1) plus any cash bonuses, commissions or similar incentive paymentaccrued during any single calendar year. 

 

(h)    “***Voluntary Termination***” means termination of the Employee’s employment by the voluntary action of the Employee other than by reason of a Disability Termination or a Death Termination.

 

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2.2    ***Termination For Cause***.    Upon TerminationFor Cause, the Company shall pay the Employee Accrued Compensation, if any. 

 

2.3    ***Termination Other Than For Cause; Expiration***.    Upon Termination Other Than For Cause on or after May 15, 2004 and before the expiration of the EmploymentAgreement, the Company shall pay the Employee all Accrued Compensation, if any, and shall continue to pay the Employee Base Salary, at the rate and upon the normal payroll schedule in effect at the time of termination, from the date of terminationuntil the latest to occur between (i) November 15, 2005 or (ii) the date which is three (3) months after the date of termination. Upon the expiration of the term of the Employment Agreement, the Company shall continue to pay the Employee BaseSalary, at the rate and upon the normal payroll schedule in effect at the time of expiration, for a period of three (3) months from the date of expiration of the term. 

 

2.4    ***Disability Termination***.    The Company shall have the right toeffect a Disability Termination by giving written notice thereof to the Employee. Upon Disability Termination, the Company shall pay the Employee all Accrued Compensation, if any, and shall continue to pay the Employee Base Salary for a period ofthree (3) months from the date of termination at the rate and upon the normal payroll schedule in effect at the time of termination. 

 

2.5    ***Death Termination***.    In the event of the Employee’s death during the term of thisAgreement, the Employee’s employment shall be deemed to have terminated as of the last day of the month during which his or her death occurs, and the Company shall promptly pay to the Employee’s estate Accrued Compensation, if any, andshall continue to pay the Employee’s estate the Employee Base Salary for a period of three (3) months from the date of termination at the rate and upon the normal payroll schedule in effect at the time of termination. 

 

2.6    ***VoluntaryTermination***.    The Employee shall have the right to effect a Voluntary Termination by giving at least 30 days advance written notice to the Company. The Company shall have the right in such case to immediately terminatethe Employee’s employment. Following the effective date of a Voluntary Termination, the Company shall pay the Employee Accrued Compensation, if any. 

 

2.7    ***Timing of Termination Payments***.    Unless expressly provided otherwise, the foregoingtermination payments shall be made at the usual and agreed times provided for in Section 3.1 of this Agreement. 

 

3.    ***Salary, Benefits, Housing Allowance, Bonus, Equity Compensation***. 

 

3.1    ***BaseSalary***.    As payment for the services to be rendered by the Employee as provided in Section 1 and subject to the provisions of Section 2 of this Agreement, the Company shall pay the Employee a “Base Salary” atthe rate of $21,666.66 per month (equivalent to $260,000.00 per year), payable on the Company’s normal payroll schedule. 

 

3.2    ***Fringe Benefits***. 

 

(a)    ***Fringe Benefits***.    The Employee shall be eligible to participate in such of theCompany’s benefit plans as are now generally available or later made generally 

 

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available to senior officers of the Company, including, without limitation, medical, dental, life, and disabilityinsurance plans. 

 

(b)    ***ExpenseReimbursement***.    The Company agrees to reimburse the Employee for all reasonable, ordinary and necessary travel and entertainment expenses incurred by the Employee in conjunction with Employee’s services to theCompany consistent with the Company’s standard reimbursement policies. The Company shall pay travel costs incurred by the Employee in conjunction with his or her services to the Company consistent with the Company’s standard travel policy.

 

(c)    ***Vacation***.    The Employee shall be entitled, without loss of compensation, to four (4) weeks of vacation per year. Unused vacation may be accrued by the Employee up to a maximumof four (4) weeks, when it will cease accruing until the Employee reduces the accrued, unused amount through use of vacation time. 

 

3.3    ***Housing Allowance***.    The Employee shall be reimbursed for his housing and travel expensesrelating to his commute to the Company’s corporate offices located in San Diego, California, not to exceed the amount of $4000.00 per month. 

 

3.4    ***Bonus***.    The Employee shall participate in any management bonus plan adopted by the Companyon terms comparable to other senior officers of the Company. 

 

3.5    ***Equity Compensation***.    As of the Effective Date, the Employee shall receive (i) 250,000 options to purchase shares of Company common stock under the Company 1999 Stock OptionPlan, pursuant to the Stock Option Agreement attached hereto as Exhibit A, and (ii) 900,000 warrants to purchase shares of Company common stock, pursuant to the Warrant attached hereto as Exhibit B. 

 

4.    ***ProprietaryInformation***.    The Employee shall as of the Effective Date execute and deliver to the Company the Employee Confidential Information and Inventions Agreement attached as Exhibit C hereto. 

 

5.    ***Miscellaneous***. 

 

5.1    ***Waiver***.    Thewaiver of the breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or other provision hereof. 

 

5.2    ***Notices***.    All notices and other communications under thisAgreement shall be in writing and shall be given by personal or courier delivery, facsimile or first class mail, certified or registered with return receipt requested, and shall be deemed to have been duly given upon receipt if personally deliveredor delivered by courier, on the date of transmission if transmitted by facsimile, or three days after mailing if mailed, to the addresses of the Company and the Employee contained in the records of the Company at the time of such notice. Any partymay Change such party’s address for notices by notice duly given pursuant to this Section 5.2. 

 

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5.3    ***Headings***.    The section headings used inthis Agreement are intended for convenience of reference and shall not by themselves determine the construction or interpretation of any provision of this Agreement. 

 

5.4    ***Governing Law***.    This Agreement shall be governed by andconstrued in accordance with the laws of the State of California applicable to contracts entered into and wholly to be performed within the State of California by California residents. 

 

5.5    ***Survival of Obligations***.    This Agreement shall be bindingupon and inure to the benefit of the executors, administrators, heirs, successors, and assigns of the parties; provided, however, that except as herein expressly provided, this Agreement shall not be assignable either by the Company (except to anaffiliate or successor of the Company) or by the Employee without the prior written consent of the other party. 

 

5.6    ***Counterparts***.    This Agreement may be executed in one or more counterparts, all of whichtaken together shall constitute one and the same Agreement. 

 

5.7    ***Withholding***.    All sums payable to the Employee hereunder shall be reduced by all federal, state, local, and other withholdings and similar taxes and payments required byapplicable law. 

 

5.8    ***Enforcement***.    If any portion of this Agreement is determined to be invalid or unenforceable, such portion shall be adjusted, rather than voided, to achieve the intent of theparties to the extent possible, and the remainder shall be enforced to the maximum extent possible. 

 

5.9    ***Entire Agreement; Modifications***.    Except as otherwise provided herein or in the exhibitshereto, this Agreement represents the entire understanding among the parties with respect to the subject matter of this Agreement, and this Agreement supersedes any and all prior and contemporaneous understandings, agreements, plans, andnegotiations, whether written or oral, with respect to the subject matter hereof, including, without limitation, any understandings, agreements, or obligations respecting any past or future compensation, bonuses, reimbursements, or other payments tothe Employee from the Company. All modifications to the Agreement must be in writing and signed by each of the parties hereto. 

 

5.10    ***Arbitration***.    Any controversy or claim arising out of or relating to this Agreement(whether in contract or tort, or both) shall be determined by binding arbitration at San Diego, California, in accordance with the commercial arbitration rules of the American Arbitration Association, by a panel of three arbitrators, one chosen byeach of the parties and the third by the two so chosen. If the two arbitrators cannot agree on a third, then the third shall be appointed in accordance with such rules. The prevailing party in any arbitration proceeding shall be awarded reasonableattorneys fees and costs of the proceedings. The arbitration award shall be final, and may be entered in and enforced by any court having jurisdiction. 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date set forthin the first paragraph. 

 

 
**MOLECULAR IMAGING CORPORATION**By: 
/s/    Steven J. Davis         

Title:
 
Vice President of Administration

 

 
**EMPLOYEE**
/s/    Kenneth C. Frederick        

Kenneth C. Frederick

 

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