ALPHA INNOTECH CORP
EX-10.3
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>ex10-3.txt
<DESCRIPTION>EX-10.3
<TEXT>
                                                                    EXHIBIT 10.3

                           ALPHA INNOTECH CORPORATION
                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and entered into as
of May  11,  2001  by and  between  Alpha  Innotech  Corporation,  a  California
corporation (the "COMPANY") and Haseeb Chaudhry (the "EMPLOYEE").

                                   BACKGROUND

         A.       The Company  desires to retain the services of the Employee as
the Chief Executive  Officer of the Company from the date of this Agreement (the
"EFFECTIVE DATE").  The Company also desires to provide  employment  security to
the  Employee,  thereby  inducing the Employee to continue  employment  with the
Company and enhancing the Employee's ability to perform effectively.

         B.       The  Employee  is willing to be employed by the Company on the
terms and subject to the conditions set 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.

                  1.2      DUTIES. The Employee shall devote all of his business
time, energy, and skill 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 performance of services under this Agreement.

         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  Total Cash  Compensation,  any accrued  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 reasonable  business
expenses incurred by the Employee in


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connection  with the  performance  of Employee's  duties  hereunder,  all to the
extent unpaid on the date of termination of Employee's employment.

                           (b)      "BASE  SALARY"  shall have the  meaning  set
forth in Section 3.1 hereof.

                           (c)      "DEATH  TERMINATION"  shall mean 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.   The  Employee  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 mental or  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 this
paragraph 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 Board of Directors of the Company of the Employee's employment (i) by reason
of the  Employee's  commission  of a felony or other illegal  conduct  involving
dishonesty,  fraud or other  matters of moral  turpitude,  (ii) by reason of the
Employee's  dishonesty  towards,  fraud upon, or deliberate  injury or attempted
injury  to the  Company  or any of its  affiliates,  or (iii) by  reason  of the
Employee's willfully engaging in misconduct which is materially and demonstrably
injurious to the Company or any of its affiliates,  or (iv) Employee's violation
of  confidentiality  obligations to the Company or  misappropriation  of Company
assets.

                           (f)      "TERMINATION  OTHER  THAN FOR  CAUSE"  means
termination  by the  Board  of  Directors  of  the  Company  of  the  Employee's
employment for any reason other than as specified in Sections  2.1(c),  (d), (e)
or (h)  hereof.  Termination  Other  Than  For  Cause  shall  also  include  any
substantial change in the Employee's duties and responsibilities as set forth in
Section 1.

                           (g)      "TOTAL  CASH  COMPENSATION"  shall  mean the
Employee's  Base  Salary  (as  defined in  Section  3.1) plus any cash  bonuses,
commissions or similar payment accrued 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.


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                  2.2      TERM. Employee shall be an "at will" employee and the
Company  shall have the right to  terminate  the  employment  of Employee at any
time, provided,  however that upon a Termination Other Than For Cause,  Employee
shall receive 30 days advance written notice.

                  2.3      TERMINATION  FOR CAUSE.  Upon  Termination For Cause,
the Company shall pay the Employee Accrued Compensation, if any.

                  2.4      TERMINATION  OTHER THAN FOR CAUSE.  Upon  Termination
Other  Than  For  Cause,   the  Company  shall  pay  the  Employee  all  Accrued
Compensation,  if any,  and shall  continue  to pay Base  Salary,  plus any cash
bonuses, commissions or similar payment accrued prior to termination,  until one
year  from the date of  termination,  at the  rate and upon the  normal  payroll
schedule in effect at the time of termination.

                  2.5      DISABILITY  TERMINATION.  The Company  shall have the
right to effect 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 Base Salary,  plus any
cash bonuses, commissions or similar payment accrued prior to termination, for a
period  of six  months  from  the date of  termination  at the rate and upon the
normal payroll schedule in effect at the time of termination.

                  2.6      DEATH TERMINATION. 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, and a lump sum payment equal to six month's Base
Salary,  plus any cash bonuses,  commissions or similar payment accrued prior to
termination,  at the rate in effect at the time of termination,  less applicable
withholding.

                  2.7      VOLUNTARY  TERMINATION.  The Employee  shall have the
right to effect a  Voluntary  Termination  by  giving  at least 30 days  advance
written notice to the Company.  During such period,  the Employee shall continue
to receive regularly scheduled Base Salary payments and benefits.  Following the
effective  date of a Voluntary  Termination,  the Company shall pay the Employee
Accrued Compensation, if any.

                  2.8      TIMING  OF  TERMINATION  PAYMENTS.  Unless  expressly
provided  otherwise,  the foregoing  termination  payments  shall be made at the
usual and agreed times provided for in Section 3.1 of this Agreement.


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<PAGE>


         3.       SALARY, BENEFITS, AND BONUS.

                  3.1      BASE  SALARY.  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"  at the rate of  $200,000  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 the  Company's  benefit  plans  as are now
generally  available or later made generally available to senior officers of the
Company,  including,  without limitation,  medical, dental, life, and disability
insurance plans.

                           (b)      EXPENSE REIMBURSEMENT. The Company agrees to
reimburse the Employee for all  reasonable,  ordinary and  necessary  travel and
entertainment  expenses  incurred by the Employee in conjunction with his or her
services to the Company  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 the amount of  vacation  per year  generally
available or later made generally  available to senior  officers of the Company.
Unused  vacation  may be accrued by the  Employee  up to a maximum of six weeks,
when it will cease  accruing  until the  Employee  reduces the  accrued,  unused
amount through use of vacation time.

                  3.3      BONUS.   The  Employee   shall   participate  in  any
management bonus plan adopted by the Company on terms comparable to other senior
officers of the Company.

         4.       CONDITIONAL NATURE OF SEVERANCE PAYMENTS.

                  4.1      NONCOMPETE.  Employee acknowledges that the nature of
the Company's  business is such that if Employee were to become  employed by, or
substantially  involved in, the business of a competitor  of the Company  during
the twelve months  following the  termination of Employee's  employment with the
Company,  it would be very  difficult for the Employee not to rely on or use the
Company's  trade  secrets  and  confidential  information.  Thus,  to avoid  the
inevitable   disclosure  of  the  Company's   trade  secrets  and   confidential
information,  Employee agrees and acknowledges  that Employee's right to receive
the severance payments set forth in Sections 2.4 and 2.5 (to the extent Employee
is otherwise  entitled to such payments) shall be conditioned  upon the Employee
not directly engaging in (whether as an employee, consultant, agent, proprietor,
principal,


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partner,  controlling stockholder,  corporate officer, director or otherwise) or
participating in the financing, operation, management or control of, any person,
firm,  corporation  or  business  that  directly  competes  with  the  Company's
business.  Upon any breach of this Section,  all severance  payments pursuant to
this Agreement shall immediately cease.

                  4.2      NON-SOLICITATION.  Until the date one year  after the
termination of Employee's  employment with the Company for any reason,  Employee
agrees and acknowledges that Employee's right to receive the severance  payments
set forth in Sections 2.4 and 2.5 (to the extent Employee is otherwise  entitled
to such  payments)  shall be  conditioned  upon Employee not either  directly or
indirectly soliciting,  inducing,  attempting to hire, recruiting,  encouraging,
taking away,  hiring any employee of the Company or causing an employee to leave
the Company either for Employee or for any other entity or person.

                  4.3      UNDERSTANDING OF COVENANTS.  The Employee  represents
that Employee:  (i) is familiar with the foregoing  covenants not to compete and
not to solicit,  and (ii) is fully aware of  Employee's  obligations  hereunder,
including,  without limitation,  the reasonableness of the length of time, scope
and geographic coverage of these covenants.

                  4.4      CONFIDENTIALITY.    Employee    shall   maintain   in
confidence  the contents and terms of this  Agreement,  including  any documents
incorporated by reference, and the consideration for this Agreement (hereinafter
collectively referred to as "Employment  Information").  Employee agrees to take
every reasonable precaution to prevent disclosure of any Employment  Information
to third  parties,  and  agrees  that there will be no  publicity,  directly  or
indirectly, concerning any Employment Information. Employee agrees to take every
precaution  to  disclose   Employment   information  only  to  those  attorneys,
accountants, governmental entities and family members who have a reasonable need
to know of such Employment Information.  After termination of employment for any
reason Employee shall continue to maintain the confidentiality of all Employment
information.

         5.       MISCELLANEOUS.

                  5.1      WAIVER.  The waiver 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
this  Agreement  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  delivered or 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


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the  Company  at the time of such  notice.  Any party may  Change  such  party's
address for notices by notice duly given pursuant to this Section 4.2.

                  5.3      HEADINGS. The section headings used in this 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
and construed 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
binding upon 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 an affiliate 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 which taken 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 by applicable 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 the parties 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 exhibits hereto, 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, and negotiations,  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 to the Employee from
the Company. All modifications to the Agreement must be in writing and signed by
each of the parties hereto.

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


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<PAGE>


                                             ALPHA INNOTECH CORPORATION


                                             By:      /S/ DARRYL RAY
                                                      --------------------------
                                                      Darryl Ray
                                             Title:   President




                                             /S/ HASEEB CHAUDHRY
                                             -----------------------------------
                                             Haseeb Chaudhry


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