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EXHIBIT 10.26
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the _8th_ day of September, 1998, by and between QUIDEL CORPORATION, a
Delaware corporation ("QUIDEL") and XXXXXX X. XXXXX, an individual ("XXXXX").
BACKGROUND
X. XXXXX has been employed by QUIDEL as its Vice President - Finance
and Administration for a number of years.
X. XXXXX is voluntarily resigning as an officer of QUIDEL and each
subsidiary thereof and as a trustee of any and all benefit plans.
C. QUIDEL and XXXXX wish to agree upon an orderly executive transition
plan that enables QUIDEL, on an interim basis, to have the benefits of XXXXX'x
continuing advice and input regarding important corporate matters.
AGREEMENT
1. RESIGNATION AS OFFICER. Concurrent with the execution and delivery
of this Agreement, XXXXX has executed and delivered to QUIDEL his resignation,
effective immediately, of all positions as an officer of QUIDEL and each
subsidiary thereof (other than the position expressly provided for herein) and
as a trustee of any and all benefit plans of QUIDEL and its affiliates. The form
of such resignation is in the form attached as Exhibit A and incorporated herein
by this reference.
2. FUTURE EMPLOYMENT. XXXXX shall continue to be employed by QUIDEL as
"Special Assistant to the President" from the date hereof until August 31, 2001.
On September 1, 2001, all employment and/or consulting relationships between the
parties are and shall automatically be forever terminated. Except as provided in
Section 4 and Section 7 hereof, nothing herein shall prohibit or limit XXXXX'x
right, on and after the date hereof, to accept employment and/or consulting
relationships with other third parties as long as XXXXX makes himself reasonably
available from time to time from the date hereof until August 31, 2001 to
promptly respond to and fulfill the reasonable requests for information and
assistance from QUIDEL's President and Chief Executive Officer or Chief
Financial Officer.
3. RESPONSIBILITIES. On and after the date hereof, XXXXX shall report
for his duties directly to QUIDEL's President and Chief Executive Officer. The
President and Chief Executive Officer shall determine XXXXX'x reasonable duties
and responsibilities.
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Notwithstanding anything to the contrary herein, in the event XXXXX is unable to
carry out his responsibilities hereunder because of his death or disability,
such inability shall not be deemed a breach or termination of this Agreement and
XXXXX or his estate, as applicable, shall continue to enjoy all of the benefits
provided herein as though XXXXX were not disabled or deceased.
4. NON-COMPETITION/NON-SOLICITATION.
(a) Non-Competition. From the date hereof until August 31, 2001, XXXXX
covenants and agrees that he shall not, directly or indirectly, have any
interest in or enter into or maintain any relationship with (whether as
director, officer, employee, agent, representative, security holder, consultant,
advisor or otherwise) any of the entities listed on Exhibit B attached hereto
and incorporated by this reference or any affiliate of such listed entities. In
the event of any breach by XXXXX of this Section 4(a), QUIDEL shall have the
right to immediately terminate this Agreement upon written notice. In the event
of such early termination, XXXXX and QUIDEL expressly agree that (i) QUIDEL
shall have no further obligation or liability to make the cash payments or
provide the benefit coverages contemplated by Section 5 below for or
attributable to any period after the date of such early termination, and (ii) no
portion of XXXXX'x unvested Options shall enjoy the benefit of vesting
acceleration on December 31, 1998 as provided in Section 6 below.
(b) Non-Solicitation of Employees. From the date hereof until the third
(3rd) anniversary date hereof, XXXXX covenants and agrees that he shall not,
directly or indirectly, by or for himself, or as the agent of another, or
through others, in any way solicit or induce, or attempt to solicit or induce,
any employee, officer, representative, consultant or other agent of QUIDEL or
any subsidiary thereof (a "QUIDEL Person") to leave the employ of or other
relationship with QUIDEL or such subsidiary or otherwise interfere with the
employment or other relationship between such person and QUIDEL or any
subsidiary thereof. Notwithstanding the foregoing, XXXXX shall have no liability
under this Section 4(b) with respect to any QUIDEL Person who leaves the employ
of or other relationship with QUIDEL or any subsidiary thereof if such QUIDEL
Person does not, within six (6) months thereafter, enter into any employment,
consulting, representative, agency or investor relationship with XXXXX or any
entity in which XXXXX has an employment, director, representative, consulting,
or investment role.
5. CASH COMPENSATION AND BENEFITS. Subject to XXXXX'x fulfillment of
his obligations under this Agreement (including without limitation those set
forth in Section 4(a) and Section 7 hereof but subject to the last sentence of
Section 3), the parties agree as follows:
(a) Base Salary. QUIDEL will continue to pay to XXXXX a base salary of
$13,833.33 per month though August 31, 1999, and $100 per month from September
1, 1999 through August 31, 2001.
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(b) Incentive Plan. XXXXX shall not be eligible to participate in or
receive payments pursuant to any incentive or bonus programs adopted for any
period commencing after March 31, 1998.
(c) Medical Insurance. QUIDEL shall, at its own expense and until the
first anniversary of the date hereof, continue to provide to XXXXX (and his
dependents who are currently covered under QUIDEL's insurance program) medical,
vision and dental benefits, life insurance, disability insurance and AD&D
coverage at the same levels and on the same terms as XXXXX and his qualifying
dependents enjoy and receive as of the date hereof; provided, however, that (i)
these benefits shall be earlier terminated or reduced, as applicable, if, when
and to the extent XXXXX receives concurrent coverage through another program,
(ii) XXXXX shall be responsible for any and all taxes if the value of such
benefits must be included in his income, (iii) the levels and nature of such
benefits may be modified by QUIDEL if, when and to the same extent modifications
to such benefits are made applicable to all other executive officers of QUIDEL,
and (iv) notwithstanding XXXXX'X continuing employment with QUIDEL, no further
insurance benefits shall be provided after the first anniversary of the date of
this Agreement.
(d) Vacation/Other Benefits. No vacation benefits or, except as
expressly provided herein, other employee-type benefits shall accrue to or for
XXXXX from and after the date hereof. All of XXXXX'x accrued but unused vacation
up to the date hereof shall be paid to him, less applicable withholdings
required by law, within two days of XXXXX'x execution and delivery hereof.
(e) Outplacement. QUIDEL shall also pay for up to a maximum of six (6)
months of the reasonable expenses of Drake Beam Xxxxx, an executive outplacement
service, it being understood that QUIDEL shall in no event have an obligation to
pay for any such services for any period after March 31, 1999.
(f) D&O Insurance. QUIDEL will continue to provide XXXXX with Directors
and Officers liability insurance covering XXXXX as to actions or omissions
during the period of time XXXXX served as an Officer or other position with
QUIDEL or any of its affiliates. Such coverage shall continue without
interruption until the expiration of the last applicable statute of limitations
and shall be pursuant to an insurance policy with substantially the same terms
and coverages as are contained in the policy covering QUIDEL's then-current
Directors and Officers.
(g) No Offsets. The amounts payable to XXXXX pursuant to this Agreement
shall not be subject to reduction or offset as a result of compensation or
benefits received by XXXXX attributable to other employment and/or consulting
arrangements XXXXX may enter into with third parties on or after the date
hereof.
(h) No Other Amounts. Except as expressly provided in this Agreement
and pursuant to the Options referred to in Section 6 below, XXXXX acknowledges
and agrees that he is entitled to no further compensation or benefits from
QUIDEL, including without limitation any further severance payments.
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6. OPTIONS. The following schedule sets forth certain particulars as to
the issued and outstanding stock options (the "Options") that have been granted
to and are currently held by XXXXX:
SHARES UNDERLYING
GRANT DATE EXPIRATION DATE EXERCISE PRICE ($/SH) OPTION (#) SHARES EXERCISABLE (#)
---------- --------------- --------------------- ----------------- ----------------------
03/08/91 03/08/01 $5.500 23,760 23,760
02/18/92 03/18/02 4.625 15,000 15,000
04/29/93 04/29/03 4.500 22,222 22,222
04/29/93 04/29/03 4.500 5,778 5,778
04/27/94 04/27/04 4.125 15,000 15,000
05/11/95 05/11/05 3.625 25,000 0
07/30/96 07/30/06 3.625 25,000 0
04/29/97 04/29/07 2.875 25,000 0
07/28/98 07/28/08 3.375 13,101 0
07/28/98 07/28/08 3.375 1,899 0
------- ------
TOTALS 171,760 81,760
======= ======
Subject to XXXXX'x fulfillment of his obligations under this Agreement
(including without limitation the obligations set forth in Section 4(a) and
Section 7 hereof but subject to the last sentence of Section 3), all unvested
Options set forth above -- except for the last two grants of Options covering an
aggregate of 15,000 shares that were granted on 7/28/98 (the "Excluded Options")
-- shall continue to vest and shall be exerciseable during the term of this
Agreement in accordance with their respective terms and, if and to the extent
any remain unvested, shall fully and automatically vest and become exercisable
on December 31, 1998. (The Excluded Options shall not under any circumstances
become exercisable and the parties hereto, by mutual agreement, hereby cancel
and terminate the Excluded Options. XXXXX also acknowledges that he will receive
no further grants of Options after the date hereof.) QUIDEL represents and
warrants that the foregoing vesting acceleration has been authorized by the
Compensation Committee of the Board of Directors acting pursuant to its
authority as set forth in Section 4(b)(vi) of QUIDEL's 1990 Employee Stock
Option Plan, as amended (the "Plan"). XXXXX understands and accepts that the
foregoing vesting acceleration may have the effect of disqualifying Options
originally granted as Incentive Stock Options so that such Options shall, for
federal and state tax purposes, be treated as Non-Qualified Stock Options. XXXXX
further acknowledges that all required tax withholdings attributable to his
exercise of the Options will either be tendered by him at the time of his
exercise or will be withheld as part of the exercise authorization provided
herein.
For all Options other than Incentive Stock Options (if any), and
pursuant to the Compensation Committee's authorization pursuant to Section
8(a)(iii) of the Plan, the consideration payable by XXXXX to QUIDEL upon
exercise of the Options and
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representing the aggregate exercise price may -- at XXXXX'x election -- be
payable in or by:
(1) cash;
(2) check;
(3) delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to
QUIDEL the amount of sale or loan proceeds required to pay the
exercise price (in which event QUIDEL shall pay for or
reimburse XXXXX for all reasonable broker commissions
attributable to such transaction); or
(4) any combination of the foregoing.
Similarly, the amount of tax required to be withheld by the Company as a result
of exercise of the Options may also be effected by one or any combination of the
foregoing at the election of XXXXX.
Except as otherwise provided in this Agreement, all Options shall
continue to be subject to and governed by the terms and conditions of the
relevant Stock Option Agreements and the Plan. Such terms include the period of
time within which XXXXX must exercise his Options after termination of his
employment with QUIDEL (i.e., 90 calendar days). Subject to the preceding
sentences, XXXXX may exercise already vested Options at any time or from time to
time during the term of this Agreement.
7. INVENTION AND CONFIDENTIALITY AGREEMENT. Nothing herein shall be
deemed to terminate or limit XXXXX'x continuing obligations under that certain
Invention and Confidential Information Agreement, dated as of August 18, 1986, a
copy of which is attached hereto as Exhibit C and incorporated herein by this
reference (the "Prior Agreement"). XXXXX acknowledges the fundamental importance
of the Prior Agreement to QUIDEL and agrees to strictly honor his obligations
thereunder.
8. GENERAL RELEASES.
(a) By XXXXX. XXXXX hereby irrevocably and unconditionally releases,
acquits and forever discharges QUIDEL and all of its current, former and future
subsidiaries, affiliates, divisions, successors, predecessors, assigns,
stockholders, directors, officers, employees, agents, representatives,
attorneys, accountants and all persons acting by, through, under or in concert
with any of them (collectively, the "QUIDEL Releasees"), from any and all
charges, complaints, claims, liabilities, obligations, promises, agreements,
damages, actions, causes of action, suits, rights, demands, costs, losses, debts
and expenses (including attorneys' fees and costs) actually incurred of any
nature whatsoever, known or unknown, suspected or unsuspected ("Claim" or
"Claims") which XXXXX now has, owns or holds, or claims to have, own or hold, or
which XXXXX at any time heretofore had, owned or held, or claimed to have had,
owned or held, or which XXXXX at any time hereafter may have, own or hold, or
claim to have, own or hold, against any of the
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QUIDEL Releasees relating to any event, act or omission that has occurred prior
to or as of the date of this Agreement.
(b) By QUIDEL. QUIDEL hereby irrevocably and unconditionally releases,
acquits and forever discharges XXXXX and all of his heirs, successors, agents,
representatives, attorneys, accountants and all persons acting by, through,
under or in concert with any of them (collectively, the "XXXXX Releasees"), from
any and all known or unknown, suspected or unsuspected, Claims which QUIDEL now
has, owns or holds, or claims to have, own or hold, or which QUIDEL at any time
heretofore had owned or held, or claimed to have had, owned or held, or which
QUIDEL at any time hereafter may have, own or hold, or claim to have, own or
hold, against any of the XXXXX Releasees relating to any event, act or omission
that has occurred prior to or as of the date of this Agreement.
(c) Waiver. XXXXX and QUIDEL each expressly waives and relinquishes all
rights and benefits afforded by Section 1542 of the Civil Code of the State of
California, and does so understanding and acknowledging the significance and
consequence of such specific waiver of Section 1542. Section 1542 of the Civil
Code of the State of California states as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Thus, notwithstanding the provisions of Section 1542, and for the
purpose of implementing a full and complete release and discharge of the QUIDEL
Releasees and the XXXXX Releasees, XXXXX and QUIDEL each expressly acknowledges
that this Agreement is intended to include in its effect, without limitation,
all Claims which he or it does not know or suspect to exist in his or its favor
at the time of execution hereof, and that this Agreement contemplates the
extinguishment of any such Claim or Claims.
XXXXX and QUIDEL each represents and warrants to the QUIDEL Releasees
and the XXXXX Releasees, respectively, that he or it has not heretofore assigned
or transferred, or purported to assign or transfer, to any person or entity, any
Claim or any portion thereof, or interest therein, and agrees to indemnify,
defend and hold the QUIDEL Releasees and the XXXXX Releasees, respectively,
harmless from and against any and all Claims, based on or arising out of any
such assignment or transfer, or purported assignment or transfer, of any Claims
or any portion thereof or interest therein.
XXXXX agrees that the releases contained herein apply without
limitation to any and all rights, claims and remedies he may have under the Age
Discrimination in Employment Act and the Older Workers Benefit Protection Act.
In accordance with those laws, XXXXX will have 21 days from receipt of this
Agreement to consider this Agreement, he shall have 7 days following the signing
of this Agreement to revoke it in writing, and this Agreement shall not be
effective or enforceable until the revocation period
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has expired. XXXXX may, if he so desires, waive the full 21 day period to
consider this Agreement.
9. MISCELLANEOUS.
(a) Entire Agreement; Modification. This Agreement and the Exhibits
attached hereto constitute the full and entire understanding and agreement of
the parties hereto with regard to the subjects hereof, and supersede all prior
agreements or understandings, written or oral, between the parties with respect
to the subject hereof. This Agreement may not be amended or modified except by a
written instrument signed by both of the parties hereto.
(b) Governing Law. This Agreement shall be governed by the internal
laws of the State of California, except to the extent to which the laws of the
United States may be applicable.
(c) Severability. In the event any provision of this Agreement is
invalid, void, illegal, or unenforceable, the remaining provisions hereof
nevertheless will continue in full force and effect without being impaired or
invalidated in any way.
(d) Notices. All notices and other communications required or permitted
under this Agreement, other than routine operational communications, will be in
writing and will be deemed to have been duly given, made and received only when
personally delivered or delivered by Federal Express, United Parcel Service or
other nationally recognized courier service, or three (3) calendar days after
having been deposited in the United States mail, certified mail, postage
prepaid, return receipt requested, addressed as set forth below:
If to QUIDEL: Quidel Corporation
00000 XxXxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: President and Chief
Executive Officer
If to XXXXX: Xxxxxx X. Xxxxx
0000 Xxxx Xxxx
Xxxxxxxxx, XX 00000
Any party may change the address to which communications or copies are
to be sent by giving notice of such change of address in conformity with the
provisions of this Section for the giving of notice.
(e) Further Assurances. Each party agrees to promptly execute,
acknowledge and deliver such other and further instruments, writings and
documents as may reasonably be requested in writing by the other party to carry
out this Agreement. Each party agrees to use all reasonable efforts and to
exercise good faith in fulfilling its or his obligations under this Agreement.
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(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument.
(g) Voluntary Agreement/Conflicts Waiver. XXXXX represents and warrants
(i) that he has carefully read the terms of this Agreement and fully understands
and accepts these terms, and (ii) that he has had full and adequate opportunity
and time, and has been advised by QUIDEL, to consult with counsel of his
choosing prior to executing this Agreement.
(h) Construction. The language herein shall be construed simply and in
accordance with its plain meaning and shall not be construed or interpreted
strictly for or against any party hereto, regardless of the source of
draftsmanship.
(i) Successors. This Agreement shall be binding upon and inure to the
benefit of the parties and their representatives, heirs, administrators,
successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
QUIDEL CORPORATION XXXXXX X. XXXXX
By:_______________________________ By:_________________________________
Xxxxx xx Xxxxx Xxxxxx X. Xxxxx
President and Chief Executive Officer
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EXHIBIT A
TO: QUIDEL CORPORATION BOARD OF DIRECTORS
FROM: XXXXXX X. XXXXX
RE: RESIGNATION AS OFFICER
Please accept this notice as my resignation, effective immediately, of
all positions as an officer of QUIDEL CORPORATION and any subsidiary thereof
(other than the employment position contemplated by my Employment Agreement
dated of even date herewith) and all positions as a trustee of any and all
benefit plans of QUIDEL CORPORATION or any subsidiary thereof.
September __8__, 1998 ____________________________________
Xxxxxx X. Xxxxx
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EXHIBIT B
DIRECT COMPETITORS
Applied Biotech, Inc.
Pharmatech
Smithkline Diagnostics/Xxxxxxx Xxxxxxx Primary Care Division
Wyntek Diagnostics, Inc.
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EXHIBIT C
INVENTION AND CONFIDENTIALITY AGREEMENT
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