Exhibit 10.19


 


	
  Dedication. Innovation.
  Transformation. TM

  	
   

  	
  HOW
  WILL WE CHANGE RADIATION NEXT? ®

  



 





 


May 5, 2004


 


Mr.
John W. Manzetti


218
Chesapeake Drive


Gibsonia,
PA 15044


 


Dear
Mr. Manzetti:


 


Reference is made to the
Agreement and Plan of Merger, dated as of October 26, 2003 (the “Merger
Agreement”), among NOMOS Corporation, a Delaware corporation (“NOMOS”), North
American Scientific, Inc., a Delaware corporation (the “Company”), and AM
Capital 1, Inc., a Delaware corporation (“AM Capital”), pursuant to which NOMOS
will merge with and into AM Capital and AM Capital  shall continue as the surviving corporation
and a wholly-owned subsidiary of the Company. 
The Company and AM Capital consider it essential to the best interests
of  the stockholders of the Company to
foster the continuous employment of key management personnel of NOMOS .


 


In
order to induce you to remain in the employ of AM Capital, the Company will
cause AM Capital to employ you and agrees that you shall receive the benefits
set forth in this letter agreement (the “Agreement”).  These benefits replace and supersede the
benefits set forth in those certain letter agreements dated February 11, 2002
and June 18, 2003, respectively, between you and NOMOS, which prior agreements
are hereby deemed null and void.


 


1.                                       Employment; Duties. 
Effective as of the Closing Date (as defined in the Merger Agreement),
AM Capital hereby agrees to employ you in the position of President of AM
Capital.  You shall be responsible for
the management of the business and affairs of AM Capital.  You shall report to, and be subject to the
direction of, the Chief Executive Officer of the Company (the “CEO”).  The CEO may assign other duties to you from
time to time, and shall have the right to modify your responsibilities from
time to time as the CEO may reasonably deem necessary or appropriate.  During the term of your employment with AM
Capital, you shall devote your full time and use your best efforts to advance
the business and welfare of AM Capital 
and 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  AM Capital or the Company, or that
would interfere with your duties hereunder.


 


2.                                       Term; Vacation. 
Unless earlier terminated as hereinafter provided, the term of your
employment hereunder shall commence on the Closing Date and shall continue for
a period of two years thereafter (the “Employment Term”).  The Employment Term shall continue for
additional one-year terms unless notice of non-renewal is given either by you
to the Company or by the Company to you at least 90  days prior to the date on which the
Employment Term is then scheduled to end. 
You shall be entitled to a period of annual vacation time equal to four
weeks per twelve-month period, to accrue pro rata during the course of each
such twelve month period.


 


Initial                    


 





















 


The
days selected for your vacation must be mutually and reasonably agreeable to
the Company and you.  In no event shall
your total accrued vacation exceed seven weeks .


 


3.                                       Base Salary; Stock Options.  The
Company shall pay you, as compensation for your services, an initial salary of
$300,000 per annum (“Base Salary”), subject to such annual increases as may be
determined in the sole discretion of the Company.  Your Base Salary shall be payable in
accordance with the Company’s standard policies and practices for payment of
salary to salaried employees.  In addition,
you will be granted options (“Options”) to purchase 40,000 shares of the
Company’s common stock, at an exercise price equal to the fair market value of
such common stock as of the Closing Date, pursuant to the Company’s Amended and
Restated 1996 Stock Option Plan (the “Plan”), or any subsequent plan adopted by
the Company.  Such Options will vest in
equal installments of 10,000 shares each on the first, second, third and fourth
anniversary of the date hereof.  As
determined from time to time by the Board of Directors of the Company, you will
also be eligible to receive additional Options under the Plan.  To the extent allowable under Internal
Revenue Service regulations, such Options shall be “incentive stock options” as
described in the Plan.  You shall be
entitled to receive Options in the form of non-statutory stock options, at your
option.


 


4.                                       Other Compensation.  In
addition to the compensation package described above, you 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 you are eligible under the general
provisions thereof (collectively, “Health Benefits”).  In addition, you will be eligible for
participation in the Company’s standard bonus program.  The bonus program for you for fiscal year
2004, ended October 31, 2004  is
described in Exhibit A to this agreement.


 


5.                                       Severance.  Subject to Section 7 of this
Agreement,  in the event your employment
is terminated at any time during the Employment Term, or this Agreement is not
renewed, you will receive (a) a severance payment
equal to twenty four months of your Base Salary if terminated in  the first year of  this Agreement, 18 months if terminated in
the second year of this Agreement and 12 months if terminated thereafter, less
standard withholding for tax and social security purposes, and (b) health
benefits coverage at your election, to the extent permitted by the Company’s
then existing insurance policies and Health Benefits plan, except as required
by law (e.g., COBRA health insurance continuation election), at the expense of
the Company for twenty four months.


 


6.                                       Payment Terms.  The
severance payment contemplated by this Agreement shall be payable (in the sole
discretion of the Company) in a lump sum within 30 days of the date of such
termination or as salary continuation over a one year period.


 


7.                                       Severance Terms.  The
severance shall be payable to you if your employment with the Company is
terminated, or if this agreement is not renewed, unless such termination or
non-renewal is (a) because of your death or Disability (as defined below); (b)
by the Company for Cause (as defined below); or (c) by you for other than Good
Reason (as defined below).


 


8.                                       Change in Control.  In
the event  that you are terminated by the
Company immediately prior to or concurrently with a Change in Control (as
defined below) and you are not employed by the successor entity in the same or
similar capacity at the same total compensation level, including bonus
opportunity, after such Change in Control, all Options held by you shall
automatically be 100% vested as of the date of such termination.  In addition, you will receive, in total, the
sum of  one  year Base Salary plus  your highest bonus received in the prior  two years


 


2





















 


and health care coverage  for 24 months as  set forth in 
Section 5.  A “Change in Control”
is defined for purposes of this Agreement as a sale of all or substantially all
of the assets of the Company or a sale, directly or indirectly, of more than
50% of the voting stock of the Company. 
This assumes that you will continue to perform your duties in the
ordinary course through the date of such event.


 


9.                                       Disability.  The Company may terminate your
employment in the event you suffer a disability that renders you unable to
perform the essential functions of his position, even with reasonable
accommodation, as defined by the Company’s then existing long term disability
insurance policy.  After the Termination
Date, which in this event shall be the date upon which notice of termination is
given, you shall receive the accrued portion of any salary, vacation and bonus
hereunder 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.  In addition, you will be entitled
to a severance payment in the gross amount equal to  six months 
Base Salary to be paid, in the sole discretion of the Company, in a lump
sum within 30 days of the date of the Termination or as salary continuation
over a  six month period.  In addition, any unvested Options granted
under Section 4 of the Agreement, any previously granted options or that may
hereafter be granted to you  shall
immediately vest as of the Termination Date.


 


10.                                 Cause.  Termination by the Company of
your employment for “Cause” shall mean termination upon the occurrence or
existence of any of the following, as reasonably determined by the CEO: (a) the
continued failure to substantially perform your duties or responsibilities,
provided that the Company has given you written notice specifying the basis
upon which the CEO determined that your duties or responsibilities were not
substantially performed and such failure remains uncorrected for a period of 30
days following receipt of such written notice; (b) a material breach by you of
any of your material obligations hereunder our under the Confidential
Information Agreement (as defined below) which remains uncured for a period of
10 days following the date that the Company has given you written notice
thereof; (c) a material breach by you of your duty not to engage in any
transaction that represents, directly or indirectly, self-dealing with Parent
or the Company or any of their affiliates which has not been approved by the
CEO if in any such case such material breach remains uncured for a period of 10
days following the date that the Company has given you written notice thereof;
(d) the repeated material breach by you of any material duty referred to in
clause (b) or (c) above as to which at least one written notice has been
previously given pursuant to such clause (b) or (c); (e) any act of
misappropriation, embezzlement, intentional fraud or similar conduct involving
the Company or any of its affiliates; (f) the violation and conviction of any
federal, state or local law or any act of moral turpitude which has a material
adverse impact on the business, reputation or operation of the Company or on
your ability to perform your duties as President; (g) intentional infliction of
any damage of a material nature to any property of the Company or any affiliate
thereof; or (h) the repeated non-prescription use of any controlled substance
or the repeated abuse of alcohol or any other non-controlled substance which
has a material adverse impact on your ability to serve in your capacity as an
employee of the Company or any affiliate thereof.


 


11.                                 Good Reason.  You shall be entitled to
terminate your employment for Good Reason. 
For purposes of this Agreement, “Good Reason” shall mean the occurrence
of:


 


(a)                                  any material diminution by the Company in
your position or responsibilities without your consent, provided that
within 30 days of any such alleged diminution, you provide the Company with
written notice of the basis for your claim that any 


 


3





















 


action by the Company is a material
diminution  and a period of at least 30
days for the Company to cure.


 


(b)                                 a reduction by the Company in your annual
base salary as the same may be increased from time to time, except for
across-the-board salary reductions similarly affecting all senior management
personnel of the Company; and


 


(c)                                  the Company’s requiring you to be based more
than 50 miles from the location at which you were based, except for required
travel on the Company’s business to an extent substantially consistent with
your present business travel obligations.


 


12.                                 Successors: Binding Agreement.


 


(a)                                  The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.


 


(b)                                 This Agreement shall inure to the benefit of
and be enforceable by you and your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.


 


13.                                 Confidential Information Agreement. 
Simultaneously with your execution hereof, you agree to execute and
deliver to the Company its standard form of Employee Invention, Trade Secret
and Confidential Information Agreement (the “Confidential Information Agreement”)
as detailed in Exhibit B attached to this agreement..


 


14.                                 Miscellaneous.  No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by you and
the Company.  No waiver by either party
hereto at any time of any breach by the other party hereto of or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly
set forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California without regard to its conflicts of law principles.


 


15.                                 Validity.  The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.


 


16.                                 Counterparts.  This
Agreement may be executed in several counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.


 


17.                                 Entire Agreement.  This
Agreement and the exhibits attached hereto sets forth the entire understanding
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer,
employee or representative


 


4





















 


of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated and cancelled.


 


If
this Agreement sets forth our understanding with respect of the subject matter
contained herein, kindly sign and return to the Company the enclosed copy of
this letter, which will then constitute our entire agreement in respect of such
subject matter.


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  North American Scientific,
  Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ L. Michael Cutrer

  	
   

  
	
   

  	
   

  	
  Name: L. Michael Cutrer

  
	
   

  	
   

  	
  Title: President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed to this 5th
  day of May, 2004:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ John W. Manzetti

  	
   

  
	
  Name: John W. Manzetti

  	
   

  	
   

  
					



 


5





















 


EXHIBIT A


 


Fiscal 2004 Incentive
Bonus Program


 


Your bonus will be a
minimum of 25% of your annual base salary if the Company meets or exceeds the
Performance Goals established for the previous Measuring Year.   Full detail of the program for 2004 will be
provided prior to the Closing Date or shortly thereafter and shall be
incorporated by reference herein.


 


6





















 


EXHIBIT B


 


Employee
Invention, Trade Secret and Confidential Information Agreement


(the “Confidential
Information Agreement”)


 


7