CHOLESTECH CORPORATION CHANGE OF CONTROL SEVERANCE AGREEMENT
Exhibit 10.62
This Change of Control Severance Agreement (the “Agreement”) is made and entered into
effective as of December 7, 2005 (the “Effective Date”), by and between Xxxxxxx Xxxxxxx (the
“Employee”) and Cholestech Corporation, a California corporation (the “Company”). Certain
capitalized terms used in this Agreement are defined in Section 1 below.
R E C I T A L S
A. It is expected that the Company from time to time will consider the possibility of a Change
of Control. The Board of Directors of the Company (the “Board”) recognizes that such consideration
can be a distraction to the Employee and can cause the Employee to consider alternative employment
opportunities.
B. The Board believes that it is in the best interests of the Company and its shareholders to
provide the Employee with an incentive to continue his employment and to maximize the value of the
Company upon a Change of Control for the benefit of its shareholders.
C. In order to provide the Employee with enhanced financial security and sufficient
encouragement to remain with the Company notwithstanding the possibility of a Change of Control,
the Board believes that it is imperative to provide the Employee with certain severance benefits
upon the Employee’s termination of employment following a Change of Control.
AGREEMENT
In consideration of the mutual covenants herein contained and the continued employment of the
Employee by the Company, the parties agree as follows:
1. Definition of Terms. The following terms referred to in this Agreement shall have
the following meanings:
(a) Cause. “Cause” shall mean (i) any act of personal dishonesty taken by the
Employee in connection with his responsibilities as an employee which is intended to result in
substantial personal enrichment of the Employee, (ii) the Employee’s conviction of a felony which
the Board reasonably believes has had or will have a material detrimental effect on the Company’s
reputation or business, (iii) a willful act by the Employee which constitutes misconduct and is
injurious to the Company, or (iv) continued willful violations by the Employee of the Employee’s
obligations to the Company after there has been delivered to the Employee a written demand for
performance from the Company which describes the basis for the Company’s belief that the Employee
has not substantially performed his duties.
(b) Change of Control. “Change of Control” shall mean the occurrence of any of the
following events:
(i) the approval by shareholders of the Company of a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving entity) more
than fifty percent (50%) of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such merger or consolidation;
(ii) any approval by the shareholders of the Company of a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or substantially all of
the Company’s assets;
(iii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under
said Act), directly or indirectly, of securities of the Company representing more than fifty
percent (50%) of the total voting power represented by the Company’s then outstanding voting
securities; or
(iv) a change in the composition of the Board, as a result of which fewer than a majority of
the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected, or nominated for election,
to the Board with the affirmative votes of at least a majority of those directors whose election or
nomination was not in connection with any transaction described in subsections (i), (ii) or (iii)
or in connection with an actual or threatened proxy contest relating to the election of directors
of the Company.
(c) Compensation Continuation Period. “Compensation Continuation Period” shall mean
the period of time commencing with termination of the Employee’s employment as a result of
Involuntary Termination at any time within 12 months after a Change of Control and ending with the
date 18 months following the date of the Employee’s Involuntary Termination.
(d) Involuntary Termination. “Involuntary Termination” shall mean (i) without the
Employee’s express written consent, a significant reduction of the Employee’s duties, position or
responsibilities relative to the Employee’s duties, position or responsibilities in effect
immediately prior to such reduction, or the removal of the Employee from such position, duties and
responsibilities, unless the Employee is provided with comparable duties, position and
responsibilities; provided, however, that a reduction in duties, position or
responsibilities solely by virtue of the Company being acquired and made part of a larger entity
(as, for example, when the Chief Executive Officer of the Company remains as such following a
Change of Control but is not made the Chief Executive Officer of the acquiring corporation) shall
not constitute an Involuntary Termination; (ii) without the Employee’s express written consent, a
substantial reduction, without good business reasons, of the facilities and perquisites (including
office space and location) available to the Employee immediately prior to such reduction; (iii)
without the Employee’s express written consent, a reduction by the Company of the Employee’s base
salary or target bonus as in effect immediately prior to such reduction; (iv) without the
Employee’s express written consent, a material reduction by the Company in the kind or level of
employee benefits to which the Employee is entitled immediately prior to such reduction with the
result that the Employee’s overall benefits
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package is significantly reduced; (v) without the Employee’s express written consent, the
relocation of the Employee on a full-time basis to a facility or a location more than fifty (50)
miles from his current location; (vi) any purported termination of the Employee by the Company
which is not effected for Cause or for which the grounds relied upon are not valid; or (vii) the
failure of the Company to obtain the assumption of this Agreement by any successors contemplated in
Section 7 below.
2. Term of Agreement. This Agreement shall terminate upon the date that all
obligations of the parties hereto under this Agreement have been satisfied or, if earlier, on the
date, prior to a Change of Control, the Employee is no longer employed by the Company.
3. At-Will Employment. The Company and the Employee acknowledge that the Employee’s
employment is and shall continue to be at-will, as defined under applicable law. If the Employee’s
employment terminates for any reason, the Employee shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement, or as may otherwise be
established under the Company’s then existing employee benefit plans or policies at the time of
termination.
4. Change of Control and Severance Benefits.
(a) Option Acceleration. If the Employee’s employment with the Company terminates as
a result of an Involuntary Termination at any time within 12 months after a Change of Control, then
one hundred percent (100%) of the shares subject to all options granted to the Employee by the
Company and still outstanding (the “Options”) shall immediately become vested and exercisable in
full upon such Involuntary Termination. Such vested shares shall continue to be subject to the
terms and conditions of the Company’s stock option plans and the applicable option agreements
between the Employee and the Company.
(b) Termination Following a Change of Control.
(i) Severance Payment Upon Involuntary Termination. If the Employee’s employment with
the Company terminates as a result of an Involuntary Termination at any time within 12 months after
a Change of Control, then the Employee shall be entitled to receive a severance payment in an
amount equal to (i) 18 months of the Employee’s base salary as in effect immediately prior to the
Involuntary Termination, (ii) 150% of the Employee’s target bonus as in effect for the fiscal year
in which the Involuntary Termination occurs and (iii) up to 100% of the Employee’s target bonus as
in effect for the fiscal year in which the Involuntary Termination occurs, with such amount
determined by the Board in its sole discretion based on the Employee’s achievement of the
management objectives on which such bonus is based and pro-rated by multiplying such bonus amount
by a fraction, the numerator of which shall be the number of days prior to the occurrence of the
Involuntary Termination during such fiscal year, and the denominator of which shall be 365. Such
severance payment shall be in lieu of any other severance payment to which the Employee shall be
entitled pursuant to any employment agreement, offer letter or the Company’s then existing
severance plans and policies. Such severance payment shall be payable over a period of 18 months
commencing on the date of the Involuntary Termination in accordance with the Company’s normal
payment practices. In addition, during the Compensation Continuation Period, the Company shall
continue to make available to the Employee and Employee’s spouse and
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dependents covered under any group health plans of the Company on the date of such termination
of employment the same level of health (i.e., medical, vision and dental) coverage and benefits as
in effect for the Employee or such covered dependents on the date immediately preceding the date of
the Employee’s termination; provided, however, that (i) the Employee constitutes a
qualified beneficiary, as defined in Section 4980B(g)(1) of the Internal Revenue Code of 1986, as
amended; and (ii) the Employee elects continuation coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time period prescribed pursuant
to COBRA.
(ii) Voluntary Resignation or Termination for Cause. If the Employee’s employment
with the Company terminates as a result of the Employee’s voluntary resignation which is not an
Involuntary Termination or if the Employee is terminated for Cause at any time after a Change of
Control, then the Employee shall not be entitled to receive severance or other benefits hereunder,
but may be eligible for those benefits (if any) as may then be established under the Company’s then
existing severance and benefits plans and policies at the time of such termination.
(c) Disability or Death. If the Employee’s employment with the Company terminates due
to the Employee’s death or disability following a Change of Control, then the Employee shall not be
entitled to receive severance or other benefits hereunder, except for those (if any) as may be then
established under the Company’s then existing severance and benefits plans and policies at the time
of such disability or death. In the event of the Employee’s death or disability after the
termination of the Employee’s employment with the Company as a result of an Involuntary Termination
within 12 months of a Change of Control, the Employee’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and legatees shall be entitled
to receive severance or other benefits hereunder.
(d) Accrued Wages and Vacation; Expenses. Without regard to the reason for, or the
timing of, the Employee’s termination of employment: (i) the Company shall pay the Employee any
unpaid base salary due for periods prior to the date of termination; (ii) the Company shall pay the
Employee all of the Employee’s accrued and unused vacation through the date of termination; and
(iii) following submission of proper expense reports by the Employee, the Company shall reimburse
the Employee for all expenses reasonably and necessarily incurred by the Employee in connection
with the business of the Company prior to the date of termination. These payments shall be made
promptly upon termination and within the period of time mandated by law.
5. Conditional Nature of Severance Payments.
(a) Non-Compete. The Employee acknowledges that the nature of the Company’s business
is such that if the Employee were to become employed by, or substantially involved in, the business
of a competitor of the Company during the 18 months following the termination of the 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, the Employee agrees and acknowledges that
the Employee’s right to receive the severance payments set forth in Section 4 (to the extent the
Employee is otherwise entitled to such payments) shall be conditioned upon the Employee not
directly or indirectly engaging in (whether as an employee, consultant, agent, proprietor,
principal, partner, stockholder, corporate officer, director or otherwise),
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nor having any ownership interest in or participating in the financing, operation, management
or control of, any person, firm, corporation or business that is a customer of the Company or whose
business is the design, production and delivery of diagnostic test systems and services. Upon any
breach of this section, all severance payments pursuant to this Agreement shall immediately cease.
(b) Non-Disparagement. The Employee agrees to refrain from any defamation, libel or
slander of the Company and its respective officers, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations and
assigns or tortious interference with the contracts and relationships of the Company and its
respective officers, directors, employees, investors, shareholders, administrators, affiliates,
divisions, subsidiaries, predecessor and successor corporations and assigns.
(c) Understanding of Covenants. The Employee represents that he (i) is familiar with
the foregoing covenants not to compete and not to disparage, and (ii) is fully aware of his
obligations hereunder, including, without limitation, the reasonableness of the length of time,
scope and geographic coverage of the covenant not to compete.
6. Golden Parachute Excise Tax. In the event that the benefits provided for in this
Agreement or otherwise payable to the Employee constitute “parachute payments” within the meaning
of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) that are subject to
the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Employee shall
receive (i) a one-time payment from the Company sufficient to pay such excise tax (the “Excise Tax
Gross-Up”), and (ii) an additional one-time payment from the Company sufficient to pay the
additional excise tax and federal and state income taxes arising from the Excise Tax Gross-Up made
by the Company to the Employee pursuant to this Section (the “Additional Gross-Up”);
provided, however, that the Company shall only pay the Excise Tax Gross-Up and
Additional Gross-Up if the cumulative value of such payments to the Employee equals or exceeds
$10,000. In the event that such payments to the Employee is less than $10,000, then the Employee’s
benefits hereunder shall be either (x) delivered in full, or (y) delivered as to such lesser extent
which would result in no portion of such severance benefits being subject to the Excise Tax,
whichever of the foregoing amounts, taking into account the applicable federal, state and local
income and employment taxes and the Excise Tax, results in the receipt by the Employee on an
after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some
portion of such benefits may be taxable under the Excise Tax. Unless the Company and the Employee
otherwise agree in writing, the determination of the Employee’s excise tax liability and the amount
required to be paid under this Section 6 shall be made in writing in good faith by the accounting
firm serving as the Company’s independent public accountants immediately prior to the Change of
Control (the “Accountants”). In the event that the Excise Tax incurred by the Employee is
determined by the Internal Revenue Service to be greater or lesser than the amount so determined by
the Accountants, the Company and the Employee agree to promptly make such additional payment,
including interest and any tax penalties, to the other party as the Accountants reasonably
determine is appropriate. For purposes of making the calculations required by this Section 6, the
Accountants may make reasonable assumptions and approximations concerning applicable taxes and may
rely on interpretations concerning the application of the Code for which there is a “substantial
authority” tax reporting position. The Company and the Employee shall furnish to the Accountants
such information and documents as the Accountants may reasonably request in order to make a
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determination under this Section 6. The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this Section 6.
7. Successors.
(a) Company’s Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company’s business and/or assets shall assume the Company’s obligations
under this Agreement and agree expressly to perform the Company’s obligations under this Agreement
in the same manner and to the same extent as the Company would be required to perform such
obligations in the absence of a succession. For all purposes under this Agreement, the term
“Company” shall include any successor to the Company’s business and/or assets which executes and
delivers the assumption agreement described in this subsection (a) or which becomes bound by the
terms of this Agreement by operation of law.
(b) Employee’s Successors. Without the written consent of the Company, the Employee
shall not assign or transfer this Agreement or any right or obligation under this Agreement to any
other person or entity. Notwithstanding the foregoing, the terms of this Agreement and all rights
of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
8. Notices.
(a) General. Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the
case of the Employee, mailed notices shall be addressed to him at the home address that he most
recently communicated to the Company in writing. In the case of the Company, mailed notices shall
be addressed to its corporate headquarters, and all notices shall be directed to the attention of
its Secretary.
(b) Notice of Termination. Any termination by the Company for Cause or by the
Employee as a result of a voluntary resignation or an Involuntary Termination shall be communicated
by a notice of termination to the other party hereto given in accordance with this Section. Such
notice shall indicate the specific termination provision in this Agreement relied upon, shall set
forth in reasonable detail the facts and circumstances claimed to provide a basis for termination
under the provision so indicated. The failure by the Employee to include in the notice any fact or
circumstance which contributes to a showing of Involuntary Termination shall not waive any right of
the Employee hereunder or preclude the Employee from asserting such fact or circumstance in
enforcing his rights hereunder.
9. Execution of Release Agreement Upon Termination. As a condition of entering into
this Agreement and receiving the benefits under Section 4, the Employee agrees to execute and not
revoke a release of claims agreement substantially in the form attached hereto as Exhibit A
upon the termination of his employment with the Company.
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10. Arbitration.
(a) Except as provided in Section 10(d) below, any dispute or controversy arising out of,
relating to, or in connection with this Agreement, or the interpretation, validity, construction,
performance, breach, or termination thereof, shall be settled by binding arbitration to be held in
Palo Alto, California, in accordance with the National Rules for the Resolution of Employment
Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may
grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator
shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered
on the arbitrator’s decision in any court having jurisdiction.
(b) The arbitrator(s) shall apply California law to the merits of any dispute or claim,
without reference to conflicts of law rules. The arbitration proceedings shall be governed by
federal arbitration law and by the Rules, without reference to state arbitration law. The Employee
hereby consents to the personal jurisdiction of the state and federal courts located in California
for any action or proceeding arising from or relating to this Agreement or relating to any
arbitration in which the parties are participants.
(c) The Employee understands that nothing in this Section modifies the Employee’s at-will
employment status. Either the Employee or the Company can terminate the employment relationship at
any time, with or without cause.
(d) THE EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. THE
EMPLOYEE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH
THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION
THEREOF TO BINDING ARBITRATION TO THE EXTENT PERMITTED BY LAW, AND THAT THIS ARBITRATION CLAUSE
CONSTITUTES A WAIVER OF THE EMPLOYEE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL
DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED
TO, THE FOLLOWING CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS
AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED;
NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL
MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC
ADVANTAGE; AND DEFAMATION.
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE, INCLUDING,
BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE
AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR
LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et
seq;
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(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT
OR EMPLOYMENT DISCRIMINATION.
11. Miscellaneous Provisions.
(a) Mitigation. The Employee shall not be required to mitigate the amount of any
payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that
the Employee may receive from any other source. However, the Employee shall not be entitled to
receive the health coverage and benefits contemplated by this Agreement in the event that the
Employee receives similar health coverage and benefits as a result of new employment during the
Compensation Continuation Period.
(b) Waiver. No provision of this Agreement may be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and
by an authorized officer of the Company (other than the Employee). No waiver by either party of
any breach of, or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the same condition or
provision at another time.
(c) Integration. This Agreement represents the entire agreement and understanding
between the parties with respect to the subject matter herein and supersedes all prior or
contemporaneous agreements, offer letters, resolutions of the Company’s Board of Directors,
understandings and arrangements, whether written or oral, regarding the same.
(d) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the internal substantive laws, but not the conflicts of law rules,
of the State of California.
(e) Severability. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.
(f) Employment Taxes. All payments made pursuant to this Agreement shall be subject
to withholding of applicable income and employment taxes.
(g) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.
[Remainder of Page Left Blank Intentionally]
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year first above written.
| COMPANY: | CHOLESTECH CORPORATION | |||||
| By: | /s/ Xxxxxx X. Xxxxxxxx XX | |||||
| Xxxxxx X. Xxxxxxxx XX | ||||||
| President and Chief Executive Officer | ||||||
EMPLOYEE: |
/s/ Xxxxxxx X. Xxxxxxx | |||||
| Xxxxxxx X. Xxxxxxx | ||||||
EXHIBIT A
FORM RELEASE OF CLAIMS AGREEMENT
This Release of Claims Agreement (this “Agreement”) is made and entered into by and between
Cholestech Corporation (the “Company”) and Xxxxxxx Xxxxxxx (the “Employee”).
WHEREAS, the Employee was employed by the Company; and
WHEREAS, the Company (or the Company’s predecessor) and the Employee have entered into a
Change of Control Severance Agreement effective as of December 1, 2005 (the “Severance Agreement”).
NOW THEREFORE, in consideration of the mutual promises made herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the
Employee (collectively referred to as the “Parties”) desiring to be legally bound do hereby agree
as follows:
1. Termination. The Employee’s employment with the Company terminated on _____,
20___.
2. Consideration. Subject to and in consideration of the Employee’s release of claims
as provided herein, the Company has agreed to pay the Employee certain benefits and the Employee
has agreed to provide certain benefits to the Company, both as set forth in the Severance
Agreement.
3. Payment of Salary. The Employee acknowledges and represents that the Company has
paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due
to the Employee.
4. Release of Claims. The Employee agrees that the foregoing consideration represents
settlement in full of all outstanding obligations owed to the Employee by the Company. The
Employee, on his own behalf and his respective heirs, family members, executors and assigns, hereby
fully and forever releases the Company and its past, present and future officers, agents,
directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries,
parents, predecessor and successor corporations, and assigns, from, and agrees not to xxx or
otherwise institute or cause to be instituted any legal or administrative proceedings concerning
any claim, duty, obligation or cause of action relating to any matters of any kind, whether
presently known or unknown, suspected or unsuspected, that he may possess arising from any
omissions, acts or facts that have occurred up until and including the Effective Date (as defined
below) of this Agreement including, without limitation:
(a) any and all claims relating to or arising from the Employee’s employment relationship with
the Company and the termination of that relationship;
(b) any and all claims relating to, or arising from, the Employee’s right to purchase, or
actual purchase of shares of stock of the Company, including, without limitation, any claims for
fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate
law and securities fraud under any state or federal law;
(c) any and all claims for wrongful discharge of employment, termination in violation of
public policy, discrimination, breach of contract (both express and implied), breach of a covenant
of good faith and fair dealing (both express and implied), promissory estoppel, negligent or
intentional infliction of emotional distress, negligent or intentional misrepresentation, negligent
or intentional interference with contract or prospective economic advantage, unfair business
practices, defamation, libel, slander, negligence, personal injury, assault, battery, invasion of
privacy, false imprisonment and conversion;
(d) any and all claims for violation of any federal, state or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair
Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and
Retraining Notification Act, the California Fair Employment and Housing Act, and Labor Code Section
201, et seq. and Section 970, et seq. and all amendments to each such Act as well as the
regulations issued thereunder;
(e) any and all claims for violation of the federal or any state constitution;
(f) any and all claims arising out of any other laws and regulations relating to employment or
employment discrimination; and
(g) any and all claims for attorneys’ fees and costs.
The Employee agrees that the release set forth in this Section 4 shall be and remain in effect
in all respects as a complete general release as to the matters released. This release does not
extend to any obligations incurred under this Agreement.
5. Acknowledgment of Waiver of Claims under ADEA. The Employee acknowledges that he
is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of
1967 (“ADEA”) and that this waiver and release is knowing and voluntary. The Employee and the
Company agree that this waiver and release does not apply to any rights or claims that may arise
under the ADEA after the Effective Date of this Agreement. The Employee acknowledges that the
consideration given for this waiver and release agreement is in addition to anything of value to
which the Employee was already entitled. The Employee further acknowledges that he has been
advised by this writing that (a) he should consult with an attorney prior to executing this
Agreement; (b) he has at least twenty-one (21) days within which to consider this Agreement; (c) he
has seven (7) days following the execution of this Agreement by the Parties to revoke the
Agreement; and (d) this Agreement shall not be effective until the revocation period has expired.
Any revocation should be in writing and delivered to the Company by the close of business on the
seventh (7th) day from the date that the Employee signs this Agreement.
A-2
6. Civil Code Section 1542. The Employee represents that he is not aware of any
claims against the Company other than the claims that are released by this Agreement. The Employee
acknowledges that he has been advised by legal counsel and is familiar with the provisions of
California Civil Code Section 1542, which provides 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.
The Employee, being aware of said code section, agrees to expressly waive any rights he may
have thereunder, as well as under any other statute or common law principles of similar effect.
7. No Pending or Future Lawsuits. The Employee represents that he has no lawsuits,
claims or actions pending in his name, or on behalf of any other person or entity, against the
Company or any other person or entity referred to herein. The Employee also represents that he
does not intend to bring any claims on his own behalf or on behalf of any other person or entity
against the Company or any other person or entity referred to herein.
8. Confidentiality. The Employee agrees to use his best efforts to maintain in
confidence the existence of this Agreement, the contents and terms of this Agreement, and the
consideration for this Agreement (hereinafter collectively referred to as “Release Information”).
The Employee agrees to take every reasonable precaution to prevent disclosure of any Release
Information to third parties and agrees that there will be no publicity, directly or indirectly,
concerning any Release Information. The Employee agrees to take every precaution to disclose
Release Information only to those attorneys, accountants, governmental entities and family members
who have a reasonable need to know of such Release Information.
9. No Cooperation. The Employee agrees he will not act in any manner that might
damage the business of the Company. The Employee agrees that he will not counsel or assist any
attorneys or their clients in the presentation or prosecution of any disputes, differences,
grievances, claims, charges or complaints by any third party against the Company and/or any
officer, director, employee, agent, representative, shareholder or attorney of the Company, unless
under a subpoena or other court order to do so.
10. Costs. The Parties shall each bear their own costs, expert fees, attorneys’ fees
and other fees incurred in connection with this Agreement.
11. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who may claim through it
to the terms and conditions of this Agreement. The Employee represents and warrants that he has
the capacity to act on his own behalf and on behalf of all who might claim through him to bind them
to the terms and conditions of this Agreement.
A-3
12. No Representations. The Employee represents that he has had the opportunity to
consult with an attorney, and has carefully read and understands the scope and effect of the
provisions of this Agreement. Neither party has relied upon any representations or statements made
by the other party hereto which are not specifically set forth in this Agreement.
13. Severability. In the event that any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said provision.
14. Entire Agreement. This Agreement and the Severance Agreement and the agreements
and plans referenced therein represent the entire agreement and understanding between the Company
and the Employee concerning the Employee’s separation from the Company, and supersede and replace
any and all prior agreements and understandings concerning the Employee’s relationship with the
Company and his compensation by the Company. This Agreement may only be amended in writing signed
by the Employee and an executive officer of the Company.
15. Governing Law. This Agreement shall be governed by the internal substantive laws,
but not the choice of law rules, of the State of California.
16. Effective Date. This Agreement is effective eight (8) days after it has been
signed by the Parties (the “Effective Date”).
17. Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall constitute an effective,
binding agreement on the part of each of the undersigned.
18. Voluntary Execution of Agreement. This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties hereto, with the full
intent of releasing all claims. The Parties acknowledge that:
(a) They have read this Agreement;
(b) They have been represented in the preparation, negotiation and execution of this Agreement
by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;
(c) They understand the terms and consequences of this Agreement and of the releases it
contains; and
(d) They are fully aware of the legal and binding effect of this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth
below.
| CHOLESTECH CORPORATION | ||||
| By: | ||||
| Title: | ||||
| Date: | ||||
| EMPLOYEE | ||||
| Xxxxxxx X. Xxxxxxx | ||||
| Date: | ||||
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