Exhibit 10.1


 


EMPLOYMENT AGREEMENT


 


This
Employment Agreement (“Agreement”) is entered into on February 20, 2003 by and
between Elliot Lebowitz, Ph.D. an individual (“Lebowitz”), and North American
Scientific, Inc., a Delaware corporation (the “Company”).


 


I.                                         Employment
by the Company and Term.


 


(a)                                  Full
Time and Best Efforts.  Subject to
the terms herein, the Company agrees to employ Lebowitz as President of its
subsidiary, Theseus Imaging, Corp. (“Theseus”), and in such other capacities as
may reasonably be requested from time to time by the Board of Directors of the
Company (the “Board”) or a duly authorized committee thereof consistent with
his position as President, and Lebowitz hereby accepts such employment.  During the term of his employment with the
Company, Lebowitz will devote his full time and use his best efforts to advance
the business and welfare of the Company, and will not engage in any other
employment or business activities for any direct or indirect remuneration that
would be directly harmful or detrimental to, or that may compete with, the
business and affairs of the Company, or that would interfere with his duties
hereunder.  Notwithstanding the
foregoing, nothing herein shall preclude Lebowitz from continuing to serve on
the board of directors of BioTransplant Inc., Immerge Biotherapeutics Inc., and
Stem Cell Sciences, Ltd., provided such service does not impact Lebowitz’s
performance of his duties as President.


 


(b)                                 Duties.  As President of Theseus, Lebowitz shall be
primarily responsible for overseeing Theseus’ overall business and organization
structure and for maintaining Theseus’ relationship with its corporate
partners, regulatory agencies, academic partners, investors, employees and
patients.  Lebowitz shall serve in a
senior management capacity and shall perform such duties as are customarily
associated with his title.


 


(c)                                  Company
Policies.  The employment
relationship between the parties shall be governed by the general employment
policies and practices of the Company, including but not limited to those
relating to protection of confidential information and assignment of
inventions, except that when the terms of this Agreement differ from or are in
conflict with the Company’s general employment policies or practices, this
Agreement shall control.


 


(d)                                 Term.  This Agreement will commence on the date
first noted above (the “Effective Date”) and will continue until terminated as
provided in Section 6 below (“Term”). 
Lebowitz acknowledges that certain provisions of this Agreement, including
without limitation Sections 7 and 8, survive termination of employment and
termination of this Agreement.


 

















 


2.                                       Base
Salary and Benefits.


 


(a)                                  Base
Salary.  Lebowitz shall receive for
services to be rendered hereunder a base salary at the rate of Two Hundred
Fifty Thousand dollars ($250,000) per annum payable at least as frequently as
monthly and subject to payroll deductions as may be necessary or customary in
respect of the Company’s salaried employees (the “Base Salary”).  The Base Salary will be reviewed by and
shall be subject to upward, but not downward, adjustment at the sole discretion
of the Chief Executive Officer subject to review and approval by the Company’s
Compensation Committee each year during the term of Lebowitz’s employment.


 


(b)                                 Participation
in Benefits Plans.  During the term
hereof, Lebowitz shall be entitled to participate in any group insurance,
hospitalization, medical, dental, health, accident, disability or similar plan
or program of the Company now existing or established hereafter to the extent
that he is eligible under the general provisions thereof.  These benefits currently include medical,
dental, life, and disability insurance and participation in a Company-sponsored
401(k) plan, Employee Stock Purchase Plan and a Profit-Sharing Plan.  The Company shall not terminate such
benefits without providing Lebowitz 30 days’ notice of the termination of such
benefits as described herein.


 


(c)                                  Vacation.  Lebowitz shall be entitled to a period of
annual vacation time equal to four (4) weeks per twelve month period, to accrue
pro rata
during the course of each such twelve month period.  The days selected for Lebowitz’s vacation must be mutually and
reasonably agreed to by the Company and Lebowitz.


 


3.                                       Bonuses.


 


(a)                                  Annual
Bonuses.  Beginning on the Effective
Date of this agreement through the Agreement’s Termination Date, Lebowitz will
be eligible to receive a bonus (the “Annual Bonus”).  Lebowitz will be deemed to have earned his bonus in full on
October 31, of the Company’s fiscal year with respect to which the bonus is
determined and paid (the “Measuring Year”), regardless of the date of
determination or payment of the bonus. 
The amount of the bonus will be determined pursuant to the terms of this
Agreement by the Board on or about the January 15 following the last day of the
Measuring Year.  The Annual Bonus will
be based on Performance Goals approved by the Board and established by the
Board in consultation with the Chief Executive Officer (“CEO”).  Lebowitz shall be entitled to an Annual
Bonus of not less than 25% of his Base Salary if the Company meets or exceeds
the Performance Goals established for the previous Measuring Year.


 


(b)                                 Other
Bonus Plans.  From time to time, the
CEO or the Board may, in their discretion, institute supplementary bonus plans
or stock option plans, for which Lebowitz may be eligible.  The terms of such bonus shall be determined
by the applicable bonus plan.  No such
bonus plan may alter or rescind Lebowitz’s rights under this Agreement without
Lebowitz’s written consent.


 


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4.                                       Stock
Options. The Company will grant Lebowitz an option to purchase 40,000
shares of Company common stock with an exercise price equal to the fair market
value of the stock on the Effective Date (the “Option”).  The Option shall be granted effective as of
the Effective Date and shall be subject to the terms and conditions of the
Company’s Stock Option Plan and a stock option agreement, which shall be
tendered to Lebowitz within five (5) days of the Effective Date.  The stock option agreement shall contain,
among other things, a four-year vesting schedule.  The Option shall be granted as “incentive stock options” to the
extent permitted under Section 422 of the Internal Revenue Code of 1986,
as amended, and the regulations thereunder.


 


5.                                       Reasonable
Business Expenses and Support. 
Lebowitz shall be reimbursed for documented and reasonable business
expenses in connection with the performance of his duties hereunder in
accordance with Company policy. 
Lebowitz shall be furnished reasonable office space, assistance and
facilities.  In addition, the Company
agrees to provide Lebowitz with a parking space at Theseus’ offices at no
charge to Lebowitz.


 


6.                                       Termination
of Employment.  As noted in
Section 1 hereof, Lebowitz’s employment and this Agreement shall continue
until terminated under the following circumstances.  The date on which Lebowitz’s employment by the Company ceases,
under any of the following circumstances, shall be defined herein as the
“Termination Date.”


 


(a)                                  Termination
by the Company for Cause.


 


(i)                                     Termination;
Payment of Accrued Salary and Vacation. 
The Board may terminate Lebowitz’s employment with the Company at any
time for Cause (as defined below), immediately upon written notice to Lebowitz
of the circumstances leading to such termination for Cause.  In the event that Lebowitz’s employment is
terminated for Cause, Lebowitz shall receive payment for all earned Base
Salary, all accrued but unused vacation and any other accrued benefits up to
and through the Termination Date (hereafter, the “Accrued Obligations”).  The Company shall have no further obligation
to pay severance of any kind whether under this Agreement or otherwise nor to
make any payment in lieu of notice (other than payment in lieu of the 30 day
cure period under the Cause definition, if applicable).


 


(ii)                                  Definition
of Cause.  “Cause” means the
occurrence or existence of any of the following with respect to Lebowitz, as
determined by a majority of the independent directors of the Board:  (a) continued failure or refusal by Lebowitz
to follow the direction of the Company’s Board regarding a material obligation
(unless such direction is considered by Lebowitz in good faith to be unlawful
or unethical), provided that the Company has given Lebowitz written notice
specifying the nature of such failure or refusal, which remains uncorrected by
Lebowitz after the lapse of 30 days following receipt of the written notice;
(b) a material breach by Lebowitz of any of his material obligations hereunder,
which remains uncured after the lapse of 30


 


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days following the date that
the Company has given Lebowitz written notice thereof;  (c) a material breach by Lebowitz of his
duty not to engage in any transaction that represents, directly or indirectly,
self-dealing with the Company or any of its Affiliates which has not been
approved by a majority of the disinterested directors of the Board or of the
terms of his employment, if in any such case such material breach remains
uncured after the lapse of 30 days following the date that the Company has
given Lebowitz written notice thereof; (d) any act of misappropriation,
embezzlement, intentional fraud or similar conduct involving the Company or any
of its Affiliates; (e) the conviction or the plea of nolo contendere in respect
of a felony involving moral turpitude; (f) intentional infliction of any damage
of a material nature to any property of the Company or any of its Affiliates;
(g) an act of moral turpitude or similar misconduct by Lebowitz that causes
significant and irreparable damage to the Company as a result of negative
publicity; or (h) the repeated abuse of any non-prescription controlled
substance or the repeated abuse of alcohol or any other non-controlled
substance which, in any case described in this clause, the Board reasonably
determines renders the Lebowitz unfit to serve in his capacity as an officer or
employee of the Company or it Affiliates.


 


(b)                                 Control
Termination.  The term “Control
Termination” shall mean a termination of Lebowitz’s employment or this
Agreement by the Company for any reason within 90 days prior to or following
the consummation of a “change of control” of the Company.


 


In the event
of a Control Termination, Lebowitz will be entitled to payment of Accrued
Obligations, a pro-rata portion of the Annual Bonus, and a severance payment in
the gross amount equal to one (1) year’s Base Salary to be paid in a lump sum
within 30 days of the date of the Control Termination.  In addition, any unvested Options granted
under Section 4 of this Agreement or that may hereafter be granted to
Lebowitz shall immediately vest as of the Termination Date.


 


The term
“change of control” shall mean a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of the
Regulation 14A promulgated under the Securities and Exchange Act of 1934 (the
“Act”) or, if Item 6(e) is no longer in effect, any regulations issued by the
Securities and Exchange Commission pursuant to the Act which serve similar
purposes; provided that, without limitation,


 


(i)                                     such
a change in control shall be deemed to have occurred if and when either (a)
except as provided in (iv) below, any “person” (as such term is used in
Sections 13(d) and 14(d) of the Act) is or becomes a “beneficial owner”
(as such term is defined in Rule 13d03 promulgated under the Act), directly or
indirectly, of securities of the Company representing 50% or more of the combined
voting power of the Company’s then outstanding securities entitled to vote with
respect to the election of its Board of Directors or (b) as the result of the
foregoing transaction or events, individuals who were members of the Board of
Directors of the Company immediately prior to any such transaction or event
shall not constitute a majority of the Board of Directors following such
transaction or event, and


 


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(ii)                                  no
change in control shall be deemed to have occurred if and when any such change
is the result of a transaction which constitutes a “Rule 13e-3 transaction” as
such term is defined in Rule 13e-3 promulgated under the Act.


 


(c)                                  Termination
by the Company Due to Lebowitz’s Disability.  The Company may terminate Lebowitz’s employment in the event
Lebowitz suffers a Disability (as defined below).  Upon termination for a Disability, Lebowitz shall be entitled to
payment of all Accrued Obligations and a severance payment in the gross amount
equal to six (6) months Base Salary to be paid in a lump sum within 30 days of
the date of the Termination.  In
addition, any unvested Options granted under Section 4 of the Agreement,
any previously granted options or that may hereafter be granted to Lebowitz
shall immediately vest as of the date of the Termination.  For the purposes of this Agreement, “Disability”
shall mean any (i) physical incapacity or mental incompetence as a result of
which Lebowitz is unable to perform substantially all his duties and responsibilities
hereunder for an aggregate of 90 days within any six (6) month period,
whether or not consecutive, during any calendar year, and (ii) which
cannot be reasonably accommodated by the Company without undue hardship.


 


(d)                                 Termination
By the Company Without Cause.  The
Company may terminate Lebowitz’s employment upon 14 days’ prior written notice
for other than cause or disability, pursuant to the following termination
payment requirements.


 


(i)                                     In
the event that Lebowitz’s employment is terminated by the Company without
Cause, the Company shall pay Lebowitz all Accrued Obligations, a pro-rata
portion of the Annual Bonus, and severance of an amount equal to one (1) year
of his then Base Salary payable in a lump sum within 30 days of the date of the
Termination, less standard withholdings for tax and social security
purposes.  The bonus may be paid upon
such date or over such period of time which is in accordance with the
applicable bonus plan. In addition, any unvested Options granted under
Section 4 of this Agreement or that may hereafter be granted to Lebowitz
shall immediately vest as of the date of the Termination.


 


(ii)                                  The
Company shall not be obligated to pay any termination payments under 5(d)(i) or
(ii) above if Lebowitz breaches the provisions of Sections 7 or 8 below.


 


(e)                                  Termination
Upon Death.  If Lebowitz dies prior
to the expiration of the term of this Agreement, the Company shall (i) continue
coverage of Lebowitz’s dependents (if any) under all benefit plans or programs
of the type listed above in paragraph 2(b) herein for a period of six (6)
months, and (ii) pay to Lebowitz’s estate the Accrued Obligations and the
pro-rata portion of the Annual Bonus through the Termination Date, less
standard withholdings for tax and social security purposes, payable, in the
case of a bonus, upon such date or over such period of time which is in
accordance with the applicable bonus plan.


 


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(f)                                    Termination
by Lebowitz For Good Reason.  Lebowitz
may terminate his employment at any time for Good Reason (as defined below)
immediately upon written notice to the Company.  In the event that Lebowitz’s employment is terminated by Lebowitz
for Good Reason, Lebowitz shall be entitled to payment of Accrued Obligations,
a pro-rata portion of the Annual Bonus, severance of an amount equal to one (1)
year of his then Base Salary payable in a lump sum within 30 days of the date
of the Termination, and continued vesting on any Options granted under
Section 4 of this Agreement or that may hereafter be granted to Lebowitz
for the period of one year following the date of Termination.


 


For purposes
of this Agreement, termination by Lebowitz for “Good Reason” shall mean the
termination of employment due to: (i) a material breach of the terms and
conditions of this Agreement by the Company; (ii) a material reduction in
the responsibility or authority of Lebowitz for the operations of Theseus or as
otherwise described in this Agreement; (iii) failure of the Company to pay the Executive’s
salary or bonus, if any, in the time and manner contemplated by this Agreement;
or (iv) the relocation of the Theseus’s headquarters outside a radius of fifty
(50) miles travel distance from its current location in Boston, Massachusetts; provided,
however, that an event described in this sentence shall not constitute
Good Reason unless it is communicated by Lebowitz to the Company in writing
within thirty (30) days of the date Lebowitz knew of such event and its impact
upon him and/or his position and, is not corrected by the Company to Lebowitz’s
reasonable satisfaction within thirty (30) days of the date of Lebowitz’s
delivery of such written notice to the Company.


 


(g)                                 Termination
by Lebowitz Without Good Reason. 
Lebowitz may terminate his employment for other than Good Reason at any
time upon 14 days’ prior notice to the Company.  A voluntary termination by Lebowitz without Good Reason shall
have the same consequences as provided in Section 6(a) for termination for
Cause.


 


(h)                                 Benefits
Upon Termination.  All benefits
provided under Paragraph 2(b) hereof shall be extended, at Lebowitz’s
election, to the extent permitted by the Company’s insurance policies and
benefit plans, for one year after Lebowitz’s Termination Date, except (a) as
required by law (e.g., COBRA health insurance continuation election) or (b) in
the event of a termination described in Paragraph 5(a).  If Lebowitz elects to continue the group
health and dental coverage following the date of termination in accordance with
COBRA, the Company shall pay the premium for such coverage for the period of
one year following the date of termination (unless such termination is for
Cause under Paragraph 5(a)).  If
the Company’s group coverage terminates during the one year period or if
Lebowitz is no longer eligible for continuation of group coverage under COBRA,
the Company shall pay Lebowitz cash in lieu of the premium payment for the
remainder of the one year period.


 


7.                                       Proprietary
Information Obligations.


 


During the
term of employment under the Agreement, Lebowitz will have access to and become
acquainted with the Company’s and the Company’s Affiliates’ confidential and
proprietary information, including, but not limited to, information or


 


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plans regarding the Company’s
and Company’s Affiliates’ customer relationships, personnel, or sales,
marketing, and financial operations and methods; trade secrets; formulas;
devices; secret inventions; processes; and other compilations of information,
records, and specifications (collectively “Proprietary Information”).  Lebowitz shall not disclose any of the
Company’s or the Company’s Affiliates’ Proprietary Information directly or
indirectly, or use it in any way, either during the term of this Agreement or
at any time thereafter, except as require in the course of his employment for
the Company or as authorized in writing by the Company.  All files, records, documents,
computer-recorded information, drawings, specifications, equipment and similar
items relating to the business of the Company or the Company’s Affiliates,
whether prepared by Lebowitz or otherwise coming into his possession, shall
remain the exclusive property of the Company or the Company’s Affiliates, as
the case may be, and shall not be removed from the premises of the Company
under an circumstances whatsoever without the prior written consent of the
Company, except when (and only for the period) necessary to carry out
Lebowitz’s duties hereunder, and if removed shall be immediately returned to
the Company upon any termination of his employment; provided, however, that
Lebowitz may retain copies of documents that would ordinarily be in the
possession of members of the investment community and any documents that were
personally owned, which copies and the information contained therein Lebowitz
agrees not to use for any business purpose. 
Notwithstanding the foregoing, Proprietary Information shall not include
(i) information which is or becomes generally public knowledge or public except
through disclosure by Lebowitz in violation of this Agreement and (ii)
information that may be required to be disclosed by applicable law.


 


8.                                       Non-Solicitation.  From the Execution Date of this agreement
through the date one year after the Termination Date, Lebowitz will not on his
own behalf or on behalf of an other person or entity, without the express
written consent of the Board, solicit or attempt to solicit, induce or
encourage any then current employee, customer, business relation, service
provider or representative of the Company to terminate or modify his, her or
its employment or business relationship with the Company.


 


9.                                       Indemnification
and D&O Insurance.  The Company
agrees that Lebowitz will be entitled to indemnification to the fullest extent
authorized by the Company’s by-laws and shall be a covered person under the
Company’s directors and officers’ liability insurance policy.


 


10.                                 Miscellaneous.


 


(a)                                  Notices.  Any notices provided hereunder must be in
writing and shall be deemed effective upon the earlier of two days following
personal delivery (including personal delivery by telecopy or telex), or the
fourth day after mailing by first class mail to the recipient at the address
indicated below:


 


To the
Company:


 


North American
Scientific, Inc


 


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20200 Sunburst
Street


Chatsworth, CA
91311


Attn:  L. Michael Cutrer


Telecopier
No:  818-734-5202


 


To Employee:


 


Elliot
Lebowitz


143 Gardner
Road


Brookline,
MA  02445


Telecopier No:


 


Or to such address or to the
attention of such other person as the recipient party will have specified by
prior written notice to the sending party.


 


(b)                                 Severability.  Any provision of this Agreement which is
deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction and subject to this Paragraph be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provisions of this Agreement invalid, illegal, or unenforceable because its
scope is considered excessive, such covenant shall be modified so that the
scope of the covenant is reduced only to the minimum extent necessary to render
the modified covenant valid, legal and enforceable.


 


(c)                                  Entire
Agreement.  This document
constitutes the final, complete, and exclusive embodiment of the entire
agreement and understanding between the parties related to the subject matter
hereof and supersedes and preempts any prior or contemporaneous understandings,
agreements, or representations by or between the parties, written or oral.


 


(d)                                 Counterparts.  This Agreement may be executed on separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
agreement.


 


(e)                                  Successors
and Assigns.  This Agreement is
intended to bind and inure to the benefit of and be enforceable by Lebowitz and
the Company, and their respective successors and assigns, except that Lebowitz
may not assign any of his duties hereunder and he may not assign any of his
rights hereunder without the prior written consent of the Board.


 


(f)                                    Amendments.  No amendments or other modifications to this
Agreement may be made except by writing and signed by both parties.  No amendment or waiver of this Agreement
requires the consent of any individual, partnership, corporation or other
entity not a party to this Agreement. 
Nothing in this Agreement, express or implied, is intended to confer
upon any third person any rights or remedies under or by reason of this
Agreement.


 


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(g)                                 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 principles of
conflicts of law.


 


IN WITNESS WHEREOF, the parties
have executed this Agreement effective as of the date it is last executed below
by either party.


 


	
   

  	
   

  
	
   

  	
  /s/ Elliot Lebowitz

  
	
   

  	
  ELLIOT LEBOWITZ

  
	
   

  	
   

  
	
   

  	
  Febuary 20, 2003

  
	
   

  	
  DATE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORTH
  AMERICAN SCIENTIFIC, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/L. Michael Cutter

  
	
   

  	
  Title:  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Febuary 19,2003

  
	
   

  	
  DATE

  



 


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