May 28, 2008 Mr. Raymond Land Yardley, Pennsylvania 19067 Dear Ray:
Exhibit 10.1
May 28, 2008
Xx. Xxxxxxx Land
000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Dear Ray:
Clarient Inc. (the “Company”) is pleased to enter into this letter agreement (the “Letter Agreement”) with you (the “Executive”) which will address the terms of Executive’s employment with the Company. The Company considers it essential to the best interests of its stockholders to attract and xxxxxx the continuous employment of key management personnel of the Company and the arrangements described in this Letter Agreement are intended to address that goal.
1. Duties. Commencing on June 5th, 2008 or a date mutually agreed upon by the Company and Executive (the “Commencement Date”), Executive will serve as Senior Vice President and Chief Financial Officer of the Company and will report directly to the Chief Executive Officer of the Company.
2. Term. Notwithstanding anything to the contrary, Executive’s employment relationship with the Company is employment “at will”. As a result, Executive’s employment may be terminated by the Company or by Executive at any time (subject to the notice provision below), in each case without any liability or obligation, except as set forth in this Letter Agreement. If Executive terminates his employment, he shall give the Company written notice of such termination not less than thirty (30) days prior to the effective date of such termination. In light of the severance benefits provided for in Section 6, the Company will have no obligation to give Executive prior notice of any such termination by the Company (whether or not such termination is without cause).
3. Compensation.
(a) Base Salary. During the term of Executive’s employment, Executive will receive a base salary of $265,000 per annum, payable in biweekly increments, subject to annual salary and performance review and potential salary increase (but not reductions) at the sole discretion of the Company.
(b) Bonus. Executive will be eligible for a performance-based bonus as a participant in the Company’s Management Incentive Plan (“MIP”) (target incentives as determined by the Compensation Committee of the Company’s Board of Directors) with an annual target payment of 60% of base salary, pro-rated for the number of months of services in any given year. Potential exists to receive as much as twice this figure based on achievement of Company and personal objectives. Any bonus that becomes payable under this subsection (b) shall be paid in accordance with the Company’s past practices under the MIP, but in no event after the later of (i) the 15th day of the third month following Executive’s first taxable year in which such bonus is no longer subject to a substantial risk of forfeiture, and (ii) the 15th day of the third month following the first taxable year of the Company in which such bonus is no longer subject to a substantial risk of forfeiture, as determined in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any Treasury Regulations and other guidance issued thereunder.
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4. Option Grant. The Compensation Committee of the Company’s Board of Directors has approved a recommendation, to be presented to and formally approved by the Company’s Board of Directors or Compensation Committee following the date of this Agreement, that on or as soon as practicable after the Commencement Date, Executive should be granted a stock option for 500,000 shares of Common Stock of the Company. Subject to Executive’s continued employment with the Company through each such date, the option shall vest as to 25% of the shares on the first anniversary of the date of grant and the remaining 75% of the shares in equal monthly installments on each monthly anniversary of the date of grant thereafter, such that all shares subject to the option shall be vested (subject to continued employment) as of the fourth anniversary of the date of grant; provided that if a Change of Control occurs during the term of employment, then the option shall vest as to all shares that remain unvested immediately prior to the consummation of such Change of Control. The option will be granted under the Company’s 2007 Incentive Award Plan (the “Option Plan”) and be subject to the same terms and conditions as are set forth in the standard form stock option agreement currently in use under the Option Plan (including such terms and conditions as are incorporated therein from the Option Plan itself), except to the extent provided otherwise in this Agreement. The option will be subject to the approval of the Board of Directors or Compensation Committee, will have an exercise price per share equal to the last sale price of the Company’s Common Stock on the date the option is approved by the Board of Directors or Compensation Committee and will expire on the tenth anniversary of the date of grant (subject to earlier termination in accordance with the terms of the Option Plan and standard form of stock option agreement thereunder). Additional equity grants may be awarded by action of the Company’s Board of Directors or a duly authorized committee of the Board and, if made, will be made in a manner commensurate with senior executives, the terms and conditions of which shall be as determined under the Company’s Option Plan and by the Company’s Board of Directors or a duly authorized committee thereof.
5. Fringe Benefits.
(a) Executive will be paid a car allowance at the rate of $600 per month.
(b) Executive is eligible for group life and accidental death and dismemberment insurance in an amount equal to one times the Executive’s annual base salary not to exceed $600,000 (assuming that Executive meets normal insurability requirements). If insurability requirements cannot be met, the maximum amount of group life insurance benefit is $225,000. Executive will be offered the opportunity to purchase voluntary life insurance for himself and his spouse and children, if applicable; and otherwise be eligible to participate in all other benefits programs offered generally by the Company to its other executives, including medical, dental, and vision insurance, short and long term disability insurance, 401(k) Plan, flexible spending account (Section 125) plan and employee assistance program.
(c) Executive will also be entitled twenty-five (25) days of vacation per annum which will accrue at the rate of 7.70 hours per pay period. However, Executive is permitted to take ten (10) days of his twenty-five (25) days of vacation during the period from August 18, 2008 to August 29th, 2008. Executive may not accrue more than forty (40) hours above his eligible vacation allowance per year. All vacation accrued will carry over year to year; however, the point at which the total number of vacation hours accrued exceeds the maximum allowable, no additional accruals will be earned until the amount is reduced below the maximum.
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(d) The Company agrees to reimburse the Employee up to Twenty Thousand Dollars ($20,000) of Relocation Expenses (as defined) relating to his relocation to a rental residence to within thirty (30) miles of the Company’s location. Such reimbursement shall be upon the presentation of reasonably detailed invoices for bona fide Relocation Expenses (as defined). For purposes hereof, “Relocation Expenses” shall mean (a) actual transportation costs for moving Employee’s household goods and cars; and (b) two (2) rental house hunting trips for his spouse.
(e) Executive may continue to serve as a director of Anika Therapeutics, Inc. and Mountain View Pharmaceuticals, Inc. so long as such board service does not interfere with the performance of the Employee’s duties to the Company. The Employee shall not serve as a director of any other company without the consent of our Board of Directors.
(f) Executive shall be covered by the Company’s directors and officers liability insurance policies and indemnification policies on the same terms and conditions as apply to the Company’s other senior executives. This provision shall survive termination of this Agreement and shall not be covered by the release contemplated by Section 6(d).
(g) Executive shall receive a monthly housing allowance and reimbursement for other duplicate expenses (i.e. expenses that are duplicative of expenses that Executive will continue to incur at his current residence) of up to an aggregate of $5,000 per month (not to exceed a total annual expense/allowance, pro rated for partial years, of $60,000) through June 30th, 2009 provided that such allowance shall be “grossed up” as necessary such that, after payment of all taxes on such allowance (and any taxes payable on any such gross-up payments), Executive still receives a total allowance of $5,000 per month (plus the full value of other duplicate expenses within the limits of this Section 5(e)). If Executive remains employed by the Company after June 30th, 2009, then the Company and Executive shall negotiate in good faith with respect to a continuation of an appropriate housing allowance or relocation package.
(h) Payment of the monthly allowances described above in (a) and (g) of this Section 5 shall be paid on a monthly basis. Without limiting the Company’s obligation pursuant to the preceding sentence, in no event shall the monthly allowances described above in (a) and (g) be made later than December 31 of the year following the year in which the expense was incurred. The allowance paid to Executive in one year shall not affect the allowance paid to Executive in any subsequent year and shall not be subject to liquidation in favor of any other benefit.
6. Severance Payments. Subject to the provisions of subsection (d) and Section 11 below and the other terms and conditions of this Letter Agreement, in the event Executive has incurred a Separation from Service (within the meaning of Section 409A(a)(2)(A)(i) of the Code, and Treasury Regulation Section 1.409A-1(h)) (“Separation from Service”) by reason of a termination of Executive’s employment: (i) by the Company without “cause,” (ii) by Executive for “good reason” within twelve months after a Change of Control, or (iii) by Executive as a result of Executive’s death or disability (any of the foregoing being a “Severance Termination”), the Company will provide Executive the benefits described in this Section 6, which shall be the only severance benefits or other payments with respect to Executive’s employment with the Company to which Executive shall be entitled. Without limiting the generality of the foregoing, these benefits are in lieu of all salary, bonuses and vacation accruals (except for salary, bonuses and vacation accruals for periods ending on the date of termination as provided in Section 8 below) and other rights Executive may have against the Company or its affiliates.
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(a) If a Severance Termination occurs, Executive will receive payment of an amount equal to twelve (12) months of his base salary in effect at the time of the Severance Termination.
(b) Upon a Severance Termination, Executive will be able to exercise any options which have become vested and exercisable on or before the termination date and until the earlier of (i) the first anniversary of the date of termination or (ii) the expiration date of the option.
(c) Upon a Severance Termination, Executive will receive continued coverage under the Company’s medical and health plans in accordance with COBRA rules and regulations following the termination date (including any period as may be required by law), provided that coverage will end if Executive obtains comparable coverage from a subsequent employer or otherwise ceases to be eligible for COBRA benefits. If Executive chooses such continuation health insurance coverage, Executive will only pay the amount paid by Executive during his employment and the Company will subsidize the remaining costs which are normally the responsibility of the former employee for twelve months or until Executive obtains insurance through another employer, whichever occurs sooner. Thereafter, Executive shall be solely responsible for paying the premiums for COBRA continuation coverage. If Executive ceases to be eligible for COBRA because the Company does not pay the premiums for its existing or group insurance policy or the Company ceases to have a group healthcare plan, the Company will pay Executive, for any portion of the period referred to above during which Executive’s COBRA eligibility ceases for such reasons, the amount of the premium it would have had to pay for Executive’s coverage under the then existing, or if none, the most recently existing, healthcare insurance policy. Executive should consult with the Company’s Manager of Human Resources concerning the process for assuming ownership of and continued premium payments for any life insurance policy. Executive will be reimbursed in accordance with Company policies promptly for all of Executive’s reasonable and necessary business expenses incurred on behalf of the Company prior to Executive’s termination date. Without limiting the Company’s obligation under the preceding sentence, the reimbursement of any expense under this subsection (c) shall be made no later than December 31 of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year and shall not be subject to liquidation in favor of any other benefit.
(d) All compensation and benefits described above in (a) through (c) of this Section 6 will be contingent upon (i) Executive’s execution of a release of all claims against the Company substantially in the form of Exhibit A and expiration of the seven-day revocation period referred to in the release, and (ii) Executive’s not engaging in any Solicitation (as defined in Section 7 of this Letter Agreement) during the period of his employment by the Company or the one-year period following Executive’s termination date.
(e) Subject to Section 11 below, the Company will pay Executive the amount described in (a) above in equal bi-weekly installments for a period of twelve (12) months with the first payment being payable on the date when the seven-day revocation period referred to below with respect to the release expires. The Company will prepare the final release (which will be substantially in the form attached as Exhibit A to this Letter Agreement) and deliver it to Executive within five business days of Executive’s termination of employment. Executive will have twenty-one (21) days in which to consider the release although Executive may execute it sooner. Please note that the release has a revocation period of seven days.
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(f) In this Letter Agreement, the term “cause” means (a) Executive’s failure to adhere to any lawful written policy of the Company (unless Executive’s failure to adhere is at the request of the Board) if Executive has been given a reasonable opportunity to comply with such policy and cure Executive’s failure to comply (which reasonable opportunity to cure must be granted for a period of at least ten days and up to thirty days, if reasonable); (b) Executive’s appropriation (or attempted appropriation) of a business opportunity of the Company, including attempting to secure or securing any personal profit in connection with any transaction entered into on behalf of the Company; (c) Executive’s misappropriation (or attempted misappropriation) of any of the Company’s funds or property (including without limitation trade secrets and other intellectual property); or (d) Executive’s conviction of, or Executive’s entering of a guilty plea or plea of no contest with respect to, a felony or the equivalent thereof. In this Letter Agreement, the term “good reason” means (i) Executive’s assignment (without Executive’s consent) to a position, title, responsibilities, or duties of a materially lesser status or degree of responsibility than the position, responsibilities, or duties of Chief Financial Officer of a comparable publicly-held Company or removal from his position as an executive officer of the Company, (ii) the relocation of the Company’s offices at which Executive is principally employed to a location which is more than thirty miles from the location of the Company’s principal offices on the date of this Letter Agreement, (iii) the reduction of Executive’s base salary or bonus opportunity, except pursuant to a reduction which also applies to the Company’s other senior executives or (iv) the requirement that Executive report to any officer of the Company other than its Chief Executive Officer; provided, however, that Executive must have given the written notice to the Company that Executive believes he has the right to terminate employment for good reason, within ninety (90) days of the initial occurrence of such event, and the Company fails to eliminate the good reason within fifteen (15) days after receipt of the notice. Further, Executive’s termination of employment must occur within 2 years from the initial occurrence of an event that constitutes good reason.
(g) In this Letter Agreement, the term “Change of Control” means (a) the issuance, sale, transfer or acquisition of shares of capital stock of the Company (including a transfer as a result of death, disability, operation of law, or otherwise) in a single transaction or a group of related transactions, as a result of which any entity, person, or group (other than Safeguard Scientifics, Inc. and/or its affiliates) acquires the beneficial ownership of newly issued, outstanding or treasury shares of the capital stock of the Company having 50% or more of the combined voting power of the Company’s then outstanding securities entitled to vote for at least a majority of the authorized number of directors of the Company or (b) any merger, consolidation, sale of all or substantially all the assets or other comparable transaction as a result of which all or substantially all of the assets and business of the Company are acquired directly or indirectly by another entity (except Safeguard Scientifics, Inc. and/or any of its affiliates). An “affiliate” of an entity is an entity controlling, controlled by, or under common control with the entity specified, directly or indirectly through one or more intermediaries. “Group” shall have the same meaning as in section 13(d) of the Securities Exchange Act of 1934, and “beneficial ownership” shall have the meaning set forth in Rule 13d-3 of the Securities and Exchange Commission adopted under the Securities Exchange Act of 1934.
(h) Executive will not be required to mitigate the amount of any payment provided for in this Letter Agreement by seeking other employment or otherwise and Executive shall be entitled to receive the severance payments provided in this Section 6 without regard to whether Executive obtains other employment or enters into other service relationships, provided Executive does not violate any of his obligations under this Section 6.
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(i) Executive acknowledges that the arrangements described in this Letter Agreement will be the only obligations of the Company or its affiliates in connection with any determination by the Company to terminate Executive’s employment with the Company. This Letter Agreement does not terminate, alter, or affect Executive’s rights under any plan or program of the Company in which Executive may participate, except as explicitly set forth herein. Executive’s participation in such plans or programs will be governed by the terms of such plans and programs.
7. Definitions of Competition and Solicitation.
(a) [Intentionally Deleted].
(b) For purposes of Section 6(d) of this Letter Agreement “Solicitation” shall mean (A) soliciting, enticing, or inducing any Customer (as defined below) to become a client, customer, OEM, distributor, or reseller of the laboratory services business of any other person, firm or corporation with respect to products or services which are competitive with products or services then sold or under development by the Company’s reference laboratory services business or to cease doing business with the Company or authorizing or knowingly approving the taking of such actions by any other person or (B) soliciting, enticing, or inducing directly or indirectly, or hiring any person who presently is or at any time during the term hereof shall be an employee of the Company to become employed by any other person, firm or corporation or to leave his or her employment with the Company or authorizing or approving any such action by any other person or entity. Providing a reference for an employee of the Company will not, however, constitute Solicitation if the employee has decided to leave the employ of the Company, is seeking other employment, and requests the reference.
(c) For purposes of this Section 7, “Customer” means any person or entity which at the time of determination, if made prior to termination of employment, or, after termination of employment, at the time of such termination, shall be, or shall have been within one year prior to such time, a client, customer, OEM, distributor, or reseller of the Company.
(d) Executive acknowledges (i) that his experience and capabilities are such that the conditions in Section 6(d) to his receiving the severance benefits referred to in Section 6 will not prevent him from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by him without losing the severance benefits and (ii) that he has, prior to the execution of this Letter Agreement, reviewed this Letter Agreement with his legal counsel. Executive acknowledges that the provisions contained in this Section 7 and in Section 6(d) are reasonable and necessary to protect the legitimate business interests of the Company and that the Company would not have entered into this Letter Agreement in the absence of such provisions.
8. Other Payments in the Event of Termination of Employment. In the event of termination of Executive’s employment for any reason, Executive will be entitled to receive upon such termination payment of all accrued, unpaid salary to the date of termination. In addition, in the event of termination of Executive’s employment for any reason other than by the Company for “cause,” Executive will be entitled to receive upon such termination a “pro rata portion” of his “bonus for the year of termination” (as those terms are defined below). “Pro rata portion” means the number of days in the calendar year of termination up to and including the date of termination divided by the total number of days in that full calendar year. The “bonus for the year of termination” means the amount Executive would have been likely to earn if he had been employed for the full year, as determined in good faith by the Board of Directors of the Company or a committee thereof.
9. Withholding; Nature of Obligations. The Company will withhold applicable taxes and other legally required deductions from all payments to be made hereunder. The Company’s obligations to make payments under this Letter Agreement are unfunded and unsecured and will be paid out of the general assets of the Company.
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10. Representations and Covenants of Executive. Executive represents and warrants to the Company that: (a) he has full power and authority to enter into this Letter Agreement and to perform his duties hereunder, (b) the execution and delivery of this Letter Agreement and the performance of his duties hereunder shall not result in an actual (as opposed to merely asserted) breach of, or constitute an actual (as opposed to merely asserted) default under, any agreement or obligation to which he may be bound or subject, including without limitation any obligations of confidentiality, noncompetition, nonsolicitation or use of information, (c) this Letter Agreement represents a valid, legally binding obligation on him and is enforceable against him in accordance with its terms except as the enforceability of this Letter Agreement may be subject to or limited by general principles of equity and by bankruptcy or other similar laws relating to or affecting the rights of creditors, (d) to Executive’s knowledge, the services contemplated by this Letter Agreement do not (i) infringe any third party’s copyright, patent, trademark, trade secret or other proprietary right, or (ii) violate any law, statute, ordinance or regulation, and (e) Executive has resigned from all positions as an employee, officer, director or executive of prior employers. Executive covenants to the Company that during his employment with the Company (a) he shall not (i) intentionally use, in connection with his employment with the Company, any confidential or proprietary information or materials belonging to any third person or entity, or (ii) knowingly violate any law, statute, ordinance or regulation and (b) he shall not breach (i) any agreement with any third party to keep in confidence any confidential or proprietary information, knowledge or data acquired prior to his execution of this Letter Agreement or (ii) any obligations of confidentiality, noncompetition, nonsolicitation or use of information.
11. Section 409A.
(a) Notwithstanding anything to the contrary in this Letter Agreement, if at the time of Executive’s Separation from Service with the Company, Executive is a “specified employee” as defined in Section 409A of the Code, as determined by the Company in accordance with Section 409A of the Code, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such Separation from Service is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in the payments or benefits ultimately paid or provided to Executive) until the date that is at least six (6) months following Executive’s Separation from Service with the Company (or the earliest date permitted under Section 409A of the Code), whereupon the Company will pay Executive a lump-sum amount equal to the cumulative amounts that would have otherwise been previously paid to Executive under this Letter Agreement during the period in which such payments or benefits were deferred. Thereafter, payments will resume in accordance with this Letter Agreement.
(b) With respect to the provisions of this Letter Agreement which provide for “nonqualified deferred compensation” within the meaning of Section 409A of the Code, this Letter Agreement shall comply with the provisions of Section 409A of the Code and the Regulations thereunder and shall be so interpreted, construed and administered.
(c) In the event that following the date hereof the Company or Executive reasonably determines that any compensation or benefits payable under this Letter Agreement may be subject to Section 409A of the Code, the Company and Executive shall work together to adopt such amendments to this Letter Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially
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reasonable actions necessary or appropriate, to (i) exempt the compensation and benefits payable under this Letter Agreement from Section 409A of the Code and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Letter Agreement or (ii) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.
12. Miscellaneous. This Letter Agreement will inure to the benefit of Executive’s personal representatives, executors, and heirs. In the event Executive dies while any amount payable under this Letter Agreement remains unpaid, all such amounts will be paid to the parties legally entitled thereto in accordance with the terms and conditions of this Letter Agreement. No term or condition set forth in this Letter Agreement may be modified, waived, or discharged unless such waiver, modification, or discharge is agreed to in writing and signed by Executive and an officer of the Company authorized to sign such writing by the Board of Directors of the Company or an authorized committee thereof. This Letter Agreement will be construed and enforced in accordance with the laws of the State of California without regard to the conflicts of laws of any state. Any controversy or claim arising out of or relating to this Letter Agreement, or the breach thereof, will be settled by arbitration in Los Angeles or Orange County, California in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association, using one arbitrator, and judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction.
13. Limit on Payments by the Company. Executive shall bear all expense of, and be solely responsible for, all federal, state, local or foreign taxes due with respect to any payment received hereunder, including, without limitation, any excise tax imposed by Section 4999 of the Code; provided, however, that any payment or benefit received or to be received by Executive in connection with a Change of Control or the termination of Executive’s employment (whether payable pursuant to the terms of this Letter Agreement (“Contract Payments”) or any other plan, arrangements or agreement with the Company or any affiliate (collectively with the Contract Payments, the “Total Payments”) shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code but only if, by reason of such reduction, the net after-tax benefit received by Executive shall exceed the net after-tax benefit received by Executive if no such reduction was made. For purposes of this Section 13, “net after-tax benefit” shall mean (i) the total of all payments and the value of all benefits which Executive receives or is then entitled to receive from the Company that would constitute “parachute payments” within the meaning of Section 280G of the Code, less (ii) the amount of all federal, state and local income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Executive (based on the rate in effect for such year as set forth in the Code as in effect at the time of the first payment of the foregoing), less (iii) the amount of excise taxes imposed with respect to the payments and benefits described in (i) above by Section 4999 of the Code. The foregoing determination shall be made by a nationally recognized accounting firm (the “Accounting Firm”) selected by the Company and reasonably acceptable to Executive (which may be, but will not be required to be, the Company’s independent auditors). The Accounting Firm shall submit its determination and detailed supporting calculations to both Executive and the Company within fifteen (15) days after receipt of a notice from either the Company or Executive that Executive may receive payments which may be “parachute payments.” If the Accounting Firm determines that such reduction is required by this Section 13, Executive, in Executive’s sole and absolute discretion, may determine which Total Payments shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code, and the Company shall pay such reduced amount to Executive. If the Accounting Firm determines that no reduction is necessary under this Section 13, it will, at the same time as it makes such determination, furnish Executive and the Company an
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opinion that Executive shall not be liable for any excise tax under Section 4999 of the Code. Executive and the Company shall each provide the Accounting Firm access to and copies of any books, records, and documents in the possession of Executive or the Company, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by this Section 13. The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by this Section 13 shall be borne by the Company.
If this Letter Agreement sets forth our agreement on the subject matter hereof, kindly sign and return to us the enclosed copy of this letter which will then constitute our legally binding agreement on this subject and supersedes any prior discussions or agreements on this subject.
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Sincerely, |
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By: Xxxxxx X. Xxxxxxx |
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Title: Chief Executive Officer |
I agree to the terms and conditions of this Letter Agreement
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Xxxxxxx Land |
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GENERAL RELEASE AND AGREEMENT
This GENERAL RELEASE AND AGREEMENT (hereinafter the “Release”) is made and entered into as of this , by and between CLARIENT, INC. (the “Company”) and Xxxxxxx Land (“Employee”).
1. Background. The parties hereto acknowledge that this Release is being entered into pursuant to the terms of the Letter Agreement, dated May , 2008 (the “Letter Agreement”), between the Company and Employee. As used in this Release, any reference to the Company shall include its predecessors and successors and, in their capacities as such, all of its present, past, and future directors, officers, employees, attorneys, insurers, agents and assigns, as well as all Company affiliates, subdivisions, subsidiaries and parents, including without limitation Safeguard Scientifics, Inc. and its subsidiaries (collectively, the “Company Affiliates”) and their respective past, present and future directors, officers, employees, consultants, attorneys, insurers, agents and assigns; and any reference to Employee shall include, in their capacities as such, his attorneys, heirs, administrators, representatives, agents, and assigns.
2. Resignation from Boards. Employee shall, and hereby does resign from such boards and officer positions with the Company and all affiliates and partner companies of the Company as such employee holds on the date hereof. In this regard, if requested, Employee agrees to pre-sign and deliver to the Company resignation letters acceptable to the Company in order to effect Employee’s resignation from certain companies and entities, and we may submit other such letters from time to time, although nothing contained herein shall prohibit Employee from resigning from such boards and officer positions at an earlier time.
3. General Release.
(a) Employee, for and in consideration of the separation payments and other benefits offered to him or her by the Company specified in the Letter Agreement that accompanies this Release and intending to be legally bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company and the Company Affiliates, of and from any and all causes of actions, suits, debts, claims, and demands whatsoever in law or in equity, which he ever had, now has, or hereafter may have or which his or her heirs, executors or administrators may have, by reason of any matter, cause, or thing whatsoever, from the beginning of his or her employment with the Company and/or the Company Affiliates to the date of this Release, and particularly, but without limitation, any claims arising from or relating in any way to his or her employment or the separation of his or her employment relationship with the Company, including, but not limited to, any claims arising under any federal, state, or local laws, including Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e et seq., (“Title VII”), the Age Discrimination in Employment Act, 29 U.S.C. Section 621 et seq. (“the ADEA”), the Americans with Disabilities Act, 42 U.S.C. Section 12101 et seq. (“ADA”), the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 301, et seq., as amended (“ERISA”), and any and all other federal, state or local laws, and any common law claims now or hereafter recognized, including claims for wrongful discharge, slander and defamation, as well as all claims for counsel fees and costs.
(b) By signing this Release, Employee represents that Employee has not commenced any proceeding against the Company or any Company Affiliate in any forum (administrative or judicial) concerning Employee’s employment.
(c) Employee agrees and covenants not to xxx or to bring, or assign to any third person, any claims or charges against the Company or any Company Affiliate with respect to any known matter arising before the date of this Release or covered by the release and not to assert against the Company or any Company Affiliate in any action, grievance, suit, litigation or proceeding any known matter before the date of this Release or covered by the release. Employee agrees that in the event of a breach of any covenant of this Release by Employee, the Company or any Company Affiliate damaged as a result of such breach shall be entitled to recover costs and reasonable attorneys’ fees in an action relating to such breach, in addition to compensatory damages.
(d) Anything herein to the contrary notwithstanding, neither party is released from any of his, her or its obligations under this Release or the Letter Agreement, and each party confirms that such obligations are the only obligations of the Company or its affiliates in connection with the cessation of Employee’s service with the Company.
(e) Employee acknowledges that this Release extends to all causes of action, suits, debts, claims and demands referred to in (a) above, known or unknown, suspected or unsuspected. By signing this Release, Employee expressly waives all rights under Section 1542 of the California Civil Code, which reads in full 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 HER MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”
(f) By signing this Release and the Letter Agreement and by making the payments and providing the benefits contemplated by the Letter, the Company does not admit any liability, wrongdoing or fault and expressly denies any such liability, wrongdoing or fault.
4. Confidentiality; Non-Disparagement.
(a) Except to the extent required by law, including SEC disclosure requirements, the Employee agrees that the terms of this Release will be kept confidential by Employee, except that Employee may advise his or her family and confidential advisors.
(b) Employee will not at any time knowingly reveal to any person or entity any of the trade secrets or confidential information of the Company or the Company Affiliates or of any third party which the Company is under an obligation to keep confidential (including, but not limited to, trade secrets or confidential information respecting inventions, products, designs, methods, know-how, techniques, systems, processes, software programs, works of authorship, customer lists, projects, plans, and proposals), and Employee shall keep secret all confidential matters relating to the Company or the Company Affiliates and shall not use or attempt to use any such confidential information in any manner which injures or causes loss or may reasonably be calculated to injure or cause loss whether directly or indirectly to the Company or the Company Affiliates. These
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restrictions contained in this sub-paragraph (b) shall not apply to: (i) information that at the time of disclosure is in the public domain through no fault of Employee; (ii) information received from a third party outside of the Company that was disclosed without a breach of any confidentiality obligation; (iii) information approved for release by written authorization of the Company or the Company Affiliate; or, (iv) information that may be required by law or an order of the court, agency or proceeding to be disclosed; provided, Employee shall provide the Company notice of any such required disclosure once Employee has knowledge of it and will help the Company at the Company’s expense to the extent reasonable to obtain an appropriate protective order.
(c) Employee represents that Employee has not taken, used or knowingly permitted to be used any notes, memorandum, reports, lists, records, drawings, sketches, specifications, software programs, data, documentation, or other materials of any nature relating to any matter within the scope of the business of the Company, the Company Affiliates, or their partner companies or concerning any of its dealings or affairs otherwise than for the benefit of the Company or the Company Affiliates. Employee shall not, after his or her termination of employment, use or knowingly permit to be used any such notes, memoranda, reports, lists, records, drawings, sketches, specifications, software programs, data, documentation, or other materials, it being agreed that all of the foregoing shall be and remain the sole and exclusive property of the Company, the Company Affiliate or client of the same, as the case may be, and that immediately upon the effectiveness of Employee’s resignation from employment, Employee shall deliver all of the foregoing, and all copies thereof, to the Company at its main office.
(d) In accordance with normal ethical and professional standards, the Company and Employee agree that they shall not in any way engage in any conduct or make any statement that would defame or disparage the other, or make to, or solicit for, the media or others, any comments, statements (whether written or oral), and the like that may be considered to be derogatory or detrimental to the good name or business reputation of either party. It is understood and agreed that the Company’s obligation under this paragraph extends only to the conduct of the Company’s senior officers. The only exception to the foregoing shall be in those circumstances in which Employee or the Company is obligated to provide information in response to an investigation by a duly authorized governmental entity or in connection with legal proceedings.
5. Indemnity.
(a) This Release shall not release the Company or any of its insurance carriers from any obligation it or they might otherwise have to defend and/or indemnify Employee and hold him harmless from any claims made against him arising out of his activities as director or officer of the Company, to the same extent as the Company or its insurance carriers are or may be obligated to defend and/or indemnify and hold harmless any other director or officer and the Company affirms its obligation to provide indemnification to Employee as a director, officer, former director, or former officer of the Company, as set forth in the Company’s bylaws and charter documents in effect on the date of the Letter Agreement.
(b) Employee agrees that Employee will personally provide reasonable assistance and cooperation to the Company, at the Company’s expense, in activities related to the prosecution or defense of any pending or future lawsuits or claims involving the Company.
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6. General.
(a) Employee understands that this Release is revocable by Employee for a period of seven (7) days following execution of the Release. This Release shall not become effective or enforceable until this seven (7) day revocation period has ended.
(b) Employee has carefully read and fully understands all the provisions of the Notice and the Release which sets forth the entire agreement between Employee and the Company, and Employee acknowledges that Employee has not relied upon any representation or statement, written or oral, not set forth in this document.
(c) Employee agrees that any breach of this Release or corresponding Letter Agreement by Employee will cause irreparable damage to the Company and that in the event of such breach the Company shall have, in addition to any and all remedies of law, the right to an injunction, specific performance or other equitable relief to prevent the violation of the obligations hereunder.
(d) No term or condition set forth in this Release may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Employee and a duly authorized officer of the Company.
(e) Any waiver by the Company of a breach of any provision of this Release shall not operate or be construed as a waiver of any subsequent breach of such provision or any other provision hereof.
IN WITNESS WHEREOF, the parties have executed this Release as of the date written above.
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CLARIENT INC. |
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